• EN

    • -+ 0.00%
    -+ 0.00%
    -+ 0.00%

    Will Beef Cost Relief and Insider Selling Reshape Texas Roadhouse’s Margin Story (TXRH)?

    Simply Wall St·12/19/2025 06:30:50
    Listen to the news
    • Earlier this week, Wells Fargo upgraded Texas Roadhouse’s rating and highlighted that current beef cost pressures are expected to ease beginning in the second half of 2026, while other analysts remained divided between Buy and Hold views and recent earnings pointed to margin pressure despite revenue growth.
    • The mix of optimism about future input cost relief, ongoing concerns over profitability, and increased insider selling has sharpened investor focus on how resilient Texas Roadhouse’s business model really is under sustained inflation in key ingredients.
    • We’ll now explore how expectations for beef cost relief and recent analyst reactions could affect Texas Roadhouse’s existing investment narrative and outlook.

    The latest GPUs need a type of rare earth metal called Dysprosium and there are only 35 companies in the world exploring or producing it. Find the list for free.

    Texas Roadhouse Investment Narrative Recap

    To own Texas Roadhouse, you generally need to believe that its value-driven, in-person dining model and steady traffic can offset ongoing cost inflation and mixed digital progress. The Wells Fargo upgrade mostly reframes, rather than changes, the near term story: easing beef costs in 2026 could support margins over time, but the key short term catalyst still hinges on whether the company can defend profitability while beef and wages stay elevated, with persistent commodity inflation remaining the biggest immediate risk.

    Against this backdrop, the recent announcement of a US$500,000,000 share repurchase program stands out, as it sits alongside higher dividends and suggests management is committing meaningful capital to the equity while margins are under pressure. For investors, this capital allocation choice interacts directly with the existing catalysts around unit growth, digital efficiency gains and traffic resilience, all of which need to work hard if beef and labor costs stay stubbornly high.

    Yet even with strong traffic and brand loyalty, investors should be aware that sustained beef inflation could still...

    Read the full narrative on Texas Roadhouse (it's free!)

    Texas Roadhouse's narrative projects $7.4 billion revenue and $594.2 million earnings by 2028. This requires 9.1% yearly revenue growth and about a $156 million earnings increase from $438.0 million today.

    Uncover how Texas Roadhouse's forecasts yield a $189.16 fair value, a 9% upside to its current price.

    Exploring Other Perspectives

    TXRH 1-Year Stock Price Chart
    TXRH 1-Year Stock Price Chart

    Five members of the Simply Wall St Community currently see fair value for Texas Roadhouse between US$186 and US$222 per share, highlighting how far individual views can stretch. Against that backdrop, the ongoing risk of elevated beef costs pressuring margins gives you a concrete issue to compare across these different opinions.

    Explore 5 other fair value estimates on Texas Roadhouse - why the stock might be worth as much as 27% more than the current price!

    Build Your Own Texas Roadhouse Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

    Want Some Alternatives?

    Right now could be the best entry point. These picks are fresh from our daily scans. Don't delay:

    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.