Texas Roadhouse Earnings Preview

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Investors never know what to expect for Texas Roadhouse (NAS: TXRH) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest on Monday. It and its wholly-owned subsidiaries operate Texas Roadhouse restaurants.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Texas Roadhouse, with 10 of 17 rating it a buy and the remainder rating it a hold. Analysts like Texas Roadhouse better than competitor BJ's Restaurants overall. Analysts still rate the stock a Moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $280 million in revenue this quarter. That would represent a rise of 9.7% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.24 per share. Estimates range from $0.22 to $0.25.

What our community says:
CAPS All-Stars are solidly behind the stock with 84% giving it an "outperform" rating. The community at large backs the All-Stars with 84.1% granting it a rating of "outperform." Fools are gung-ho about Texas Roadhouse and haven't been shy with their opinions lately, logging 164 posts in the past 30 days. Texas Roadhouse's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Texas Roadhouse's profit has risen year over year by an average of 14.6%. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

19.9%

17.8%

18.7%

19.6%

Operating Margin

10.6%

6.4%

8.7%

9.1%

Net Margin

7.0%

4.1%

5.7%

5.9%

One final thing: If you want to keep tabs on Texas Roadhouse movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time this article was published

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