'Road Kill' – And A Fresh Breakout – On The Texas Roadhouse Menu

Home to menu items like "Road Kill" chop steak and "Fall-Off-The-Bone Ribs," Texas Roadhouse (TXRH) offers casual dining across 49 states, one U.S. territory and 10 foreign countries. Currently, the menu for Texas Roadhouse stock includes a cup-with-handle pattern offering a 199.99 buy point.

While the restaurateur did not join Cheesecake Factory (CAKE) on this month's list of new buys by the best mutual funds, Texas Roadhouse saddled up next to its industry peer on the Investor's Business Daily Breakout Stocks Index.

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Rounding Up Rising Estimates

In addition to 728 locations for its namesake restaurant, Texas Roadhouse also operates 50 Bubba's 33 casual dining locations and 14 Jaggers fast-casual restaurants.

For the first quarter, the Louisville, Ky.-based company posted 10% sales growth to just under $1.5 billion, marking at least eight quarters of double-digit gains. For the second quarter, Wall Street expects Texas Roadhouse to top $1.5 billion in revenue with a 12% gain over the prior year's quarter.

After a string of strong double-digit earnings growth, Texas Roadhouse reported a 1% gain to $1.70 per share for the first quarter. Analysts see the growth pace picking up for the next two quarters. They expect 6% growth to $1.89 per share for the second quarter and 11% growth to $1.40 in the third quarter.

For the full year, Wall Street forecasts 3% earnings growth to $6.69 per share, followed by a 13% jump to $7.56 in 2026.

The company pays a dividend, currently yielding 1.44% on an annualized basis.

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Texas Roadhouse Resets Table With Fresh Buy Point

On Tuesday, shares fell on news that Chris Monroe was no longer the company's chief financial officer. Texas Roadhouse stock fell below its 21-day exponential moving average but came off the morning's lows.

The purveyor of hand-cut steaks has crafted a handle to offer a 199.99 entry. The current pattern is a first-stage setup since Texas Roadhouse reset its base count in April by undercutting the low in its prior base.

In other positive technical indicators, the 21-day line has climbed back above the 50-day moving average. Now look for the rising 50-day line to retake the longer-term 200-day benchmark.

Meanwhile, Texas Roadhouse is not alone at the breakout table. Fellow restaurant stocks Cheesecake Factory, Chili's parent Brinker International (EAT), Dutch Bros (BROS) and Darden Restaurants (DRI) are in or near new buy zones.

IBD Breakout Opportunities ETF

The IBD Breakout Opportunities ETF (BOUT) from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to invest in the entire index in addition to, or rather than, buying individual stocks. Learn more here about the ETF and Innovator.

Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.

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