Texas Roadhouse Inc (TXRH) receives a strong rating of 72 from Investors watch Data analysis. The proprietary rating system focuses on the underlying health of a company by examining its stock price, earnings and growth rate. Based on these valuation analyses, TXRH is better valued than 72% of stocks. Investors who focus primarily on buy-and-hold strategies find the valuation ratio relevant to their goals when making investment decisions.
Analysis of parameters
TXRH has a trailing twelve-month price-to-earnings (PE) ratio of 25.8. A historical moving average of around 15 points to poor value for TXRH stock as investors are paying a higher share price relative to the company’s earnings. TXRH’s high trailing PE ratio shows that the firm has been trading above its fair market value lately. 3.84 Holding trailing 12 months earnings per share (EPS) does not prove the current value of the stock. However, PE ratios do not necessarily change the company’s projected growth rate, resulting in many new companies having high PE ratios that may attract investors despite insufficient earnings. TXRH’s 12-month forward PE to Growth (PEG) ratio of 1.52 is considered weak value as the market is overvaluing the company’s earnings growth. TXRH’s PEG comes from its price-to-earnings ratio divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and stock price. Because they incorporate more fundamental elements of a company’s overall health and focus on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.
Summary
TXRH’s valuation metrics are weak at current prices due to its inflated PEG ratio despite strong growth. TXRH’s PE and PEG are worse than the market average, resulting in a below-average valuation score. Click here for the full report on Texas Roadhouse Inc (TXRH) stock.
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