Texas Roadhouse: A Delectable Business At An Unappetizing Price

Daniel Jones Investing Group Leader Follow Summary Texas Roadhouse, Inc. has delivered strong revenue, profit, and cash flow growth, but shares now appear expensive relative to peers. TXRH continues to expand company-operated locations, prioritizing control and revenue over franchising, despite lower margins. Comparable sales and guest traffic remain robust, with both Texas Roadhouse and Bubba’s 33 outperforming in a price-conscious consumer environment. I maintain a neutral rating on TXRH due to lofty valuation multiples and near-term economic risks, particularly commodity and labor inflation. Looking for a helping hand in the market? Members of Crude Value Insights get exclusive ideas and guidance to navigate any climate. Learn More » FireAtDusk/iStock Editorial via Getty Images Over the last few years now, things have gone much better for Texas Roadhouse, Inc. ( TXRH ) than I thought they would. Back in early December of last year, after having been bullish about the business, This article was written by Daniel Jones 37.78K Followers Follow Daniel is an avid and active professional investor. He runs Crude Value Insights, a value-oriented newsletter aimed at analyzing the cash flows and assessing the value of companies in the oil and gas space. His primary focus is on finding businesses that are trading at a significant discount to their intrinsic value by employing a combination of Benjamin Graham's investment philosophy and a contrarian approach to the market and the securities therein. Learn more. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.