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El Pollo LoCo
(NASDAQ:LOCO)
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Rating:70Outperform
Price Target:
$17.50
▲(12.04% Upside)
Action:Reiterated
Date:09/26/26
LOCO scores well on fundamentals and outlook: improving margins and a much stronger leverage profile, reinforced by raised guidance and continued operational momentum. The score is held back primarily by weakening recent cash flow conversion and bearish near-term technicals (below key moving averages with negative MACD), while valuation (P/E ~12.1) provides additional support.
Positive Factors
Operating Momentum and Guidance
Raised comparable-sales and EBITDA guidance, alongside planned unit openings, indicates management sees sustained operating momentum. Higher restaurant-level margins and lower planned CapEx could support earnings growth and expansion while preserving more cash over the next several quarters.
Negative Factors
Traffic Decline
Falling transactions indicate that recent sales growth depends substantially on higher average checks rather than broader customer traffic. If pricing or mix benefits moderate, weak frequency could constrain comparable-sales growth and make sustained revenue expansion more difficult.
Read all positive and negative factors
Positive Factors
Negative Factors
Operating Momentum and Guidance
Raised comparable-sales and EBITDA guidance, alongside planned unit openings, indicates management sees sustained operating momentum. Higher restaurant-level margins and lower planned CapEx could support earnings growth and expansion while preserving more cash over the next several quarters.
Read all positive factors
El Pollo LoCo (LOCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$477.80M
Dividend Yield15.42%
Average Volume (3M)237.66K
Price to Earnings (P/E)12.8
Beta (1Y)0.72
Revenue Growth4.40%
EPS Growth39.48%
CountryUS
Employees4,034
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)1.18
Shares Outstanding30,432,938
10 Day Avg. Volume261,774
30 Day Avg. Volume237,656
Financial Highlights & Ratios
PEG Ratio1.98
Price to Book (P/B)1.05
Price to Sales (P/S)0.62
P/FCF Ratio12.03
Enterprise Value/Market Cap1.51
Enterprise Value/Revenue1.45
Enterprise Value/Gross Profit5.10
Enterprise Value/Ebitda10.38
Forecast
1Y Price Target
$18.13Price Target Upside16.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)1.03
Revenue Forecast (FY)$504.40M
El Pollo LoCo Business Overview & Revenue Model
Company Description
El Pollo Loco Holdings, Inc., primarily operating through its El Pollo Loco, Inc. subsidiary, is engaged in the development, franchising, licensing, and direct management of quick-service restaurants under the El Pollo Loco brand. By May 4, 2022, ...
How the Company Makes Money
El Pollo Loco primarily makes money through restaurant sales and, to a lesser extent, franchising-related revenue. (1) Company-operated restaurant revenue: The largest revenue stream is sales of food and beverages at company-owned locations, gener...
El Pollo LoCo Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call conveyed clear operational momentum: positive same-store sales, margin improvement, digital and loyalty strength, successful menu innovation, and accelerated unit growth with raised EBITDA guidance and reduced capex. Headwinds remain around commodity inflation (notably produce), modest transaction declines, a quarter-over-quarter reliance on higher checks, a one-time legal settlement impacting G&A comparability, and a modest cash balance. Overall the positive drivers and upward guidance outweigh the challenges discussed.Positive Updates
Same-Store Sales and Revenue Growth
Systemwide same store sales grew 3.9% in Q2 2026; total revenue increased to $129.6M from $125.8M a year ago. Company-operated restaurant revenue rose 3.7% to $108.1M driven by 3% company comparable restaurant sales and contributions from newly opened company restaurants.
Negative Updates
Commodity Inflation and COGS Pressure
Food & paper costs increased ~90 basis points to 25.4% of company restaurant sales in Q2, driven primarily by a 4.1% commodity inflation spike (largely produce). Company expects full-year commodity inflation of 2.5%-3.5%.
Read all updates
Q2-2026 Updates
Positive
Negative
Same-Store Sales and Revenue Growth
Systemwide same store sales grew 3.9% in Q2 2026; total revenue increased to $129.6M from $125.8M a year ago. Company-operated restaurant revenue rose 3.7% to $108.1M driven by 3% company comparable restaurant sales and contributions from newly opened company restaurants.
Read all positive updates
Company Guidance
Management raised 2026 guidance, increasing full‑year system‑wide comparable same‑store sales to 3.5%–4.5% (Q3 to date through 7/29 at +5.8% and Q3 guidance ~3.5%–4.5%), and upping adjusted EBITDA to $68–70 million while trimming CapEx to $33–37 million and projecting depreciation & amortization of $18–18.5 million. They reiterated new unit growth of roughly 18–20 openings (3–4 company and 15–16 franchise), maintained G&A of $52–54 million excluding one‑time items, and an estimated effective tax rate of ~29%–29.5% (pre‑discrete). Restaurant‑level margin is expected to improve to 18.25%–18.75% for the year (Q3 guide 18%–18.5%), with full‑year commodity inflation forecast at 2.5%–3.5% and wage inflation at 1.5%–2.5%. Liquidity as of 7/1/2026 included $30 million of debt, $13.3 million cash, a $150 million revolver extended to 8/4/2031, and a $21 million net revolver paydown year‑to‑date.El Pollo LoCo Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
82
Very Positive
Cash Flow
54
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 500.79M | 490.05M | 473.01M | 468.66M | 469.96M | 454.36M |
| Gross Profit | 141.84M | 140.35M | 103.52M | 93.37M | 83.70M | 99.27M |
| EBITDA | 69.70M | 58.01M | 56.91M | 55.09M | 44.97M | 56.45M |
| Net Income | 34.86M | 26.49M | 25.68M | 25.55M | 20.80M | 29.12M |
Balance Sheet | ||||||
| Total Assets | 618.79M | 606.65M | 592.01M | 592.30M | 597.22M | 613.79M |
| Cash, Cash Equivalents and Short-Term Investments | 13.28M | 6.23M | 2.48M | 7.29M | 20.49M | 30.05M |
| Total Debt | 219.40M | 239.57M | 263.02M | 273.33M | 252.88M | 233.47M |
| Total Liabilities | 301.74M | 315.57M | 331.35M | 341.61M | 316.07M | 303.16M |
| Stockholders Equity | 317.04M | 291.08M | 260.67M | 250.70M | 281.15M | 310.62M |
Cash Flow | ||||||
| Free Cash Flow | 41.01M | 25.44M | 27.70M | 19.36M | 18.63M | 35.06M |
| Operating Cash Flow | 73.94M | 48.08M | 46.78M | 40.69M | 38.55M | 52.10M |
| Investing Cash Flow | -32.94M | -22.64M | -18.94M | -13.45M | -18.91M | -12.48M |
| Financing Cash Flow | -36.71M | -21.70M | -32.65M | -40.45M | -29.19M | -22.79M |
El Pollo LoCo Technical Analysis
Negative
15.62
Price Trends
15.06
Negative
15.48
Negative
13.98
Positive
Market Momentum
0.20
Negative
47.87
Neutral
24.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOCO, the sentiment is Negative. The current price of 15.62 is above the 20-day moving average (MA) of 15.01, above the 50-day MA of 15.06, and above the 200-day MA of 13.98, indicating a neutral trend. The MACD of 0.20 indicates Negative momentum. The RSI at 47.87 is Neutral, neither overbought nor oversold. The STOCH value of 24.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LOCO.
El Pollo LoCo Risk Analysis
El Pollo LoCo disclosed 35 risk factors in its most recent earnings report. El Pollo LoCo reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
El Pollo LoCo Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.79B | 29.87 | 38.83% | 1.02% | 5.66% | 14.01% | |
70 Outperform | $477.80M | 12.76 | 11.68% | 15.42% | 4.40% | 39.48% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
52 Neutral | $1.24B | 9.52 | 109.00% | 7.80% | -0.98% | -31.26% | |
47 Neutral | $212.12M | 6.36 | -3.65% | 5.73% | -20.21% | ― | |
47 Neutral | $616.62M | 22.52 | -6.17% | 10.09% | -5.65% | -64.96% |
* Consumer Cyclical Sector Average
LOCO
El Pollo LoCo
15.04
5.65
60.17%
JACK
Jack In The Box
11.41
-6.96
-37.89%
PZZA
Papa John's International
18.66
-32.29
-63.38%
CAKE
Cheesecake Factory
112.44
57.52
104.75%
WEN
Wendy's
6.57
-1.91
-22.50%
El Pollo LoCo Corporate Events
Business Operations and StrategyExecutive/Board Changes
El Pollo Loco Names Damon Thomas Chief Operating Officer
Positive
Sep 25, 2026
On September 21, 2026, El Pollo Loco appointed Damon Thomas as Chief Operating Officer, reporting to CEO Elizabeth “Liz” Williams, in a move that brings extensive operations experience from Shake Shack, Yoshinoya America and other food...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.