TXRH Valuation - Is Texas Roadhouse Inc Over or Undervalued?

Comprehensive analysis of Texas Roadhouse Inc valuation metrics including P/E, P/B, P/S, and EV/EBITDA ratios

Updated September 2, 2026-6 min read-View Full Analysis

Current Stock Price

$191.57

Market Cap

$11.41B

Valuation Date

Sep 2, 2026

Valuation Verdict

Fairly Valued

Based on valuation multiples, TXRH appears reasonably priced relative to fundamentals. Metrics show balanced valuation.

Key Valuation Metrics

These four fundamental valuation ratios help determine if TXRH is trading at a fair price relative to its earnings, assets, revenue, and cash flow generation.

P/E Ratio (Price-to-Earnings)

High

27.68x

Near market average

Investors pay $27.68 for every $1 of annual earnings

P/B Ratio (Price-to-Book)

High

7.52x

Premium to book value

Stock trades at 7.52x its book value per share

P/S Ratio (Price-to-Sales)

Good

1.88x

Low relative to sales

Market values each $1 of revenue at $1.88

EV/EBITDA

N/A

EBITDA data unavailable

How to Interpret These Metrics

P/E Ratio: Lower P/E often indicates better value, but compare against industry peers. High-growth companies typically have higher P/E ratios. Market average is 15-20x.

P/B Ratio: Values below 1.0 suggest the stock trades below its net asset value, which could indicate undervaluation or fundamental problems. Technology companies often trade at higher P/B ratios.

P/S Ratio: Useful for unprofitable companies or comparing revenue efficiency. Lower is generally better, but high-margin businesses can justify higher P/S ratios.

EV/EBITDA: Accounts for debt and excludes non-cash expenses, making it ideal for comparing companies with different capital structures. Values under 10x often indicate good value.

How TXRH Compares to Peers

What This Means for Investors

Balanced Valuation

Texas Roadhouse Inc (TXRH) appears fairly valued based on current multiples. This balanced valuation suggests the stock is priced appropriately relative to its fundamentals. For investors, this means the stock may be suitable for those seeking exposure to Consumer Cyclical without taking on significant valuation risk in either direction.

Bullish Considerations

Attractive price-to-sales multiple

Bearish Considerations

High premium to book value

Complete Your Analysis

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Price Forecast

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Analyst Ratings

Wall Street consensus and targets

Deep Valuation Analysis

DCF model and intrinsic value

Frequently Asked Questions

What is TXRH's P/E ratio and what does it mean?

TXRH has a P/E (Price-to-Earnings) ratio of 27.68. This means investors are paying $27.68 for every $1 of annual earnings. A lower P/E generally suggests better value, but it's important to compare against industry peers and growth prospects. The market average P/E is typically 15-20x.

Is TXRH stock overvalued or undervalued?

Based on our analysis of key valuation metrics (P/E, P/B, P/S, EV/EBITDA), TXRH appears fairly valued. Based on valuation multiples, TXRH appears reasonably priced relative to fundamentals. Metrics show balanced valuation. However, valuation is just one factor to consider alongside growth prospects, competitive position, and market conditions.

What is a good P/E ratio for TXRH?

There's no single "good" P/E ratio as it varies by industry and growth stage. For Texas Roadhouse Inc, compare the current P/E of 27.68 against: (1) Industry peers, (2) Historical average P/E for TXRH, (3) Expected earnings growth rate. High-growth companies often justify higher P/E ratios, while mature companies typically trade at lower multiples.

How do I use valuation ratios to make investment decisions?

Valuation ratios are screening tools, not buy/sell signals. Use them to: (1) Compare TXRH against competitors, (2) Identify potential over/undervaluation, (3) Understand what you're paying for earnings, assets, or sales. Combine valuation analysis with fundamental research, growth prospects, and technical analysis for comprehensive decision-making.

What is EV/EBITDA and why does it matter?

EV/EBITDA (Enterprise Value to EBITDA) is N/A for TXRH. This ratio is useful because it accounts for debt and excludes non-cash expenses, making it better for comparing companies with different capital structures. Lower EV/EBITDA generally indicates better value. It's particularly useful for comparing companies in capital-intensive industries.

Disclaimer: This valuation analysis is for informational and educational purposes only and should not be considered investment advice. Valuation metrics are just one factor in investment decisions. Always conduct comprehensive research and consult with a qualified financial advisor before making investment decisions. Past performance and current valuations do not guarantee future results.