This Steakhouse is Serving Up 47% Gains While Rivals Go Cold

“Texas Roadhouse slaps” began one thread on Reddit, with over 1,300 upvotes. “They have the best rolls in the world” said another with over 3,000 votes. If there’s anything America loves it’s cheap, delicious meat. Case in point—Texas Roadhouse is on fire this year, and I’m not just talking about their grills. 

While other comparable restaurants like Outback Steakhouse (down 42% YTD) and Cracker Barrel (down 40% YTD) are barely staying afloat, Texas Roadhouse is flipping the script and absolutely crushing it. By the way, how are they messing up Cracker Barrel? I’ll save that rant for another time but some hash brown casserole sounds pretty good right now. 

Anyways, one analyst even called Texas Roadhouse meals “An affordable luxury that’s not much more than a meal at McDonalds”. I mean, there aren’t many places where you can get a steak, baked potato, salad, and endless rolls for $20. Maybe that’s why Texas Roadhouse shares are up a sizzling 47% in 2024 so far. The Louisville, Kentucky based company is also planning to open 45 new restaurants by the end of the year. 

The financials? They’re looking just as hot. Texas Roadhouse raked in $1.3 billion in sales last quarter alone, marking a 15% jump from the previous year. Margins are also looking sharp, thanks to bigger guest checks and treamlined staffing that’s cutting down on wasted hours. Even with the economy in recession territory, customers are still lining up outside the doors.

Now, you’re probably wondering, “How are they handling inflation?” Well, wage inflation might be running at around 2.5%, but Texas Roadhouse has it under control. Instead of going for big price hikes, they’ve been smart, nudging menu prices up by about 3% (just enough to cover costs without scaring off customers). Just how I am making those subtle changes to my fantasy football roster—just a tweak here and there to keep things running smoothly, no need to hit the panic button.

Now, if you’re wondering about stock, here's where it gets interesting. Analysts are pumped about their future. They’re predicting earnings per share (EPS) will jump 40% over the next year. 

Oh and let’s not forget, with the company opening another 45 new spots this year, by the time we ring in 2025, they’ll be flirting with 800 locations. That’s some serious growth while everyone else is just trying to survive. 

And investors? They’re loving Texas Roadhouse just as much as we love their rolls (and yeah, I’ll take another basket, please). The stock hit an all-time high of $180.69 in late September. Sure, it’s cooled off slightly since, but it’s still sitting pretty near the top.

Analysts think this stock could grow another 40% next year, which makes now a solid time to consider getting in. If you’re looking for some mouthwatering gains, Texas Roadhouse might just be your next main course.

P.S. Our surprise alert is coming in hot today. It’s already up 55% and based on everything we’re seeing, it’s just getting started. Want to get a piece of the action? Click here ASAP to upgrade to premium.

Stock.News has positions in Texas Roadhouse, Cracker Barrel, and McDonald’s.