Texas Roadhouse (TXRH): Exploring Valuation After Recent Share Price Gains

Texas Roadhouse (TXRH) shares have edged higher over the past week, reflecting a modest upswing that has caught some investors' attention. The move comes as market participants continue to weigh the company’s steady revenue and income growth in comparison to broader sector trends.

See our latest analysis for Texas Roadhouse.

The recent surge in Texas Roadhouse’s share price stands out against the muted tone seen earlier this year. While its latest 1-week and 1-month share price returns of 8.7% and 8% respectively hint at renewed optimism, the 1-year total shareholder return remains slightly negative. Still, investors who’ve held over the long haul are sitting on substantial gains, with total shareholder returns topping 95% over three years and 166% over five years. This highlights the company’s steady performance and long-term growth story.

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With shares up in recent weeks but analysts seeing a potential upside, investors are left to wonder whether Texas Roadhouse is trading at a bargain or if the market has already factored in all the company’s future growth prospects.

Most Popular Narrative: 9.8% Undervalued

Compared to the recent close of $177.48, the narrative’s fair value calculation pegs Texas Roadhouse’s potential nearly 10% higher, signaling room for upside if projections hold true. This perspective is anchored in robust expansion, digital adoption, and the assumption that operational gains will fuel future earnings momentum. Let’s hear firsthand the assumptions driving this outlook.

Expansion of Bubba's 33 and Jaggers brands, with a sizable pipeline of openings planned and a proven infrastructure and leadership team, supports sustained unit growth and future revenue acceleration as new stores mature.

Read the complete narrative.

Curious what bold growth and operational moves have analysts reaching for those higher targets? There is one driving force in these projections, a financial lever you might not expect. Unlock the full narrative to discover the surprising assumptions fueling this valuation.

Result: Fair Value of $196.71 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent beef inflation and slow digital adoption could squeeze margins and hinder Texas Roadhouse’s ability to sustain growth rates that exceed those of the industry.

Find out about the key risks to this Texas Roadhouse narrative.

Build Your Own Texas Roadhouse Narrative

If you’d rather dive into the numbers yourself or carve out a perspective that matches your own research, you can easily build a custom narrative in just a few minutes. Do it your way

Prefer to form your own view? Our platform makes it easy to explore a stock's fundamentals and create your own narrative in minutes.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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