Hot IPO Cava Group and burrito king Chipotle Mexican Grill are just two restaurant stocks earning the highest-possible 99 Composite Rating. Texas Roadhouse has also found a seat at that table as shares of TXRH stock serve up a new buy zone.
The restaurant group ranks a strong No. 13 out of the 197 industries IBD tracks. Other highly rated peers include Shake Shack, Wingstop, Sweetgreen and Kura Sushi USA. On March 15, the IBD Stock Analysis column featured Kura Sushi just before shares jumped to a record high, then pulled back on Tuesday.
Texas Roadhouse has just saddled up to a spot on the IBD Breakout Stocks Index alongside Shake Shack and Wingstop.
See Who Joins TXRH, SHAK And WING The IBD Breakout Stocks Index
Savvy Investors Hungry For Shares Of TXRH Stock
Despite its name, Texas Roadhouse is actually headquartered in Louisville, Ky. (Yes, it does have restaurants in Texas, too.)
The purveyor of fall-off-the-bone ribs, hand-cut steaks, Texas-size combos and more operates more than 740 restaurants in 49 states and 10 foreign countries.
Texas Roadhouse earned a spot on this month's list of new buys by the best mutual funds. Fellow restaurateurs Chipotle Mexican Grill and Wingstop also make the cut.
The table below further shows the demand for shares of TXRH stock and that of the other top restaurant stocks.
Texas Roadhouse sports a B+ Accumulation Rating as well as a 1.2 up/down volume ratio, where anything above 1.0 points to demand.
| Company | Symbol | Comp Rating | EPS Rating | RS Rating | SMR Rating | A/D Rating | Up/Down Vol |
|---|---|---|---|---|---|---|---|
| Texas Roadhouse | TXRH | 99 | 88 | 91 | A | B+ | 1.2 |
| Cava Group | CAVA | 99 | 81 | 96 | A | A- | 1.9 |
| Chipotle Mexican Grill | CMG | 99 | 97 | 93 | A | A+ | 2.1 |
| Shake Shack | SHAK | 98 | 81 | 95 | C | B | 1.6 |
| Sweetgreen | SG | 97 | 52 | 99 | C | A+ | 3.2 |
| Kura Sushi USA | KRUS | 96 | 51 | 95 | C | A | 1.6 |
| Wingstop | WING | 96 | 95 | 96 | n/a | B+ | 2.3 |
Texas Roadhouse Corrals New Buy Point
In December, TXRH stock cleared a 116.20 buy point in a first-stage cup with handle. From there, the stock continued to soar heading into earnings on Feb. 15.
Investors liked what they saw when Texas Roadhouse posted accelerating earnings and sales growth. Year-over-year revenue jumped 19% to just under $1.38 billion. Earnings spiked 29% to $1.40 a share.
Shares gapped up to a one-day gain of more than 10%. In a sign of strength and demand, the stock held those gains and continued to trade in a tight range.
Texas Roadhouse went on to complete and break out of a four-weeks-tight formation. Currently, TXRH stock trades within buy range from that breakout. And it appears to be forming another tight pattern.
Meanwhile, Chipotle and Cava — the two fellow restaurant stocks with a perfect 99 Composite Rating — also continue to show strength.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF 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.
