Texas Roadhouse (NASDAQ: TXRH) runs a popular American steakhouse chain, with three main flavors: the namesake Texas Roadhouse, the sports‑bar‑themed Bubba’s 33, and the fast‑casual Jaggers. Its money mostly comes from food and drink sales—dine‑in and to‑go—plus a steady stream from gift cards, and high‑margin royalties and franchise fees. As of mid‑2025, the brand stretches across nearly 800 franchised locations around the world: about 660 Texas Roadhouse restaurants in the US, 140 international, plus 50 Bubba’s 33s and 14 Jaggers. Margins get a lift from menu tweaks (like the 1.4% price bump in Q2 2025), healthy guest traffic, and bigger spending per visit, while franchising keeps the back office happy with cash but little extra work. Texas Roadhouse jostles for headlines with big players like Darden Restaurants (which runs Olive Garden and LongHorn Steakhouse), Bloomin’ Brands (Outback, Carrabba’s), Brinker International (Chili’s, Maggiano’s), plus fast‑casual challengers like Five Guys and Shake Shack. In a year when the whole casual‑dining scene only grew sales by 4.7%, Texas Roadhouse sprinted ahead with a 13.8% jump, thanks to loyal customers, expansion, and sharp execution. By 2024, it overtook Olive Garden as the top‑selling US casual‑dining chain, notching 14.7% growth while Olive Garden barely budged (0.8%). The result: Texas Roadhouse is cementing its spot as a value‑first, experience‑led, home‑style staple.

From August 2024 to August 12, 2025, Texas Roadhouse shares climbed about 5.1%. That’s a decent showing—but well behind the S&P 500’s hefty 19.5% gain, leaving a 14.4% gap. After hitting a record high of $203.10 last November, shares pulled back thanks to ongoing challenges: commodity costs pushed up by 5.2%, labor expenses up 3.8%, and the squeeze dented margins and investor confidence. Even though same‑store sales went up 5.8% and overall system sales jumped 12.7% in the most recent quarter, investors are a bit less bubbly given continued worries about squeezed profits and persistent inflation eating into the full‑year outlook.

Texas Roadhouse has been serving up double‑digit revenue growth: up 16% year‑over‑year to $5.37 billion in 2024, and another 12.7% to $1.51 billion in the latest quarter. Driving this—not just more locations (store weeks up 7.2% from new openings and franchise acquisitions), but richer sales at existing restaurants too (+5.8%, with 4% more guests and 1.8% higher checks). Management expects about 5% systemwide store‑week growth in 2025 (with roughly 2% of that from franchise takeovers) and plans to keep raising menu prices at a measured pace. Their focus on innovation—rolling out Digital Kitchen Systems to over 200 locations, experimenting with new drinks to catch the non‑alcoholic wave, and building out Bubba’s 33 and Jaggers—should add more ways to grow. Analysts see revenue rising to $6.94 billion by 2027 (working out to about 8.8% annual growth), and expect EPS to jump from $6.69 in 2025 to $8.48 in 2027, with a combination of new stores and wider profit margins doing the heavy lifting.

Texas Roadhouse stands out for steady profits and smart capital use. In 2024, operating margin hit 9.61%—a big step up from 7.64% in 2023—and sat at an impressive 17.1% of restaurant sales this past quarter, despite rising costs. Return on equity is around 32.3% (far above the industry’s 6.4%), and return on invested capital lands at 14.7%, showing off a business model that protects its turf with a signature made‑from‑scratch menu, warm hospitality, and firm control over operations. The balance sheet is built on rock‑solid ground with net cash (Net Debt/EBITDA close to zero), and free cash flow surged 83.2% last year to $399 million. That supports a 1.45% dividend yield, buybacks ($9.8 million in Q2), and healthy investment, all while keeping capital spending at a disciplined 6% of sales.

Shares trade at a forward price‑to‑earnings (P/E) of 28.66x—a bit of a premium over the market’s 25.52x, and above Texas Roadhouse’s own five‑year average of about 22x. That speaks to investor optimism around quality and growth. On an enterprise‑value‑to‑sales (EV/Sales) basis, the stock is at 2.19x—above its five‑year average of 1.87x, but notably below the market norm of 4.40x, so there’s a valuation gap compared to bigger groups. Free cash flow yield is 1.85%, below Texas Roadhouse’s own five‑year average (2.92%), and a tad beneath the market (2%). All told, the stock’s pricing reflects both its growth credentials and its strong profit profile.

Analyst consensus is firmly in the “Buy” camp, with an average one‑year price target of $192.95 (about 10% upside) and a median target of $192.00. Short interest sits at 4.37% of the float (2.90 million shares), and the stock could be covered in 2.62 days, hinting at mild bearish bets but nothing alarming. Insiders have been busy selling—ten sales totaling around $3 million in proceeds in the past six months, with no insiders buying. Institutions own around 94.8% of shares, showing strong support from big funds. On the technical side, shares currently sit about 6.7% below the 50‑day moving average, and with 30.1% volatility (slightly more than the market’s 27.6%), technical signals look a bit mixed.

Key risks include inflationary margin pressure, valuation sensitivity, economic and consumer discretionary risk, competitive intensity, and execution and expansion risks. Bull case highlights robust same‑store sales, high‑return unit growth, strong free cash flow, operational innovation, and premium brand equity. Bear case warns of margin compression, premium valuation, traffic vulnerability, insider and analyst caution.

On our radar: Q3 2025 earnings release (results due after the market closes October 23, 2025), franchise acquisition closures (expected wrap‑up of about 8 franchise buyouts in Q4 2025), digital kitchen rollout milestone (more than 60% of kitchens converted to digital by year‑end 2025), and guidance adjustment point (current full‑year commodity inflation forecast sits at 5%).

Texas Roadhouse Tops Olive Garden As Sales Leader In 2024

In 2024, Texas Roadhouse surpassed Olive Garden to become the top‑selling U.S. casual‑dining chain, driven by double‑digit revenue growth, strong same‑store sales, and expansion of its flagship and new concepts. Despite inflationary pressures, the company posted healthy margins, free cash flow, and a robust capital structure, but faces risks from rising commodity costs, valuation sensitivity, and competitive intensity.