Operating Margin - Texas Roadhouse Inc (XBER:ROW)

Watchlist Manager

Watchlist

Price: 148.55 EUR 1.82%

Market Cap: 6.5B EUR

8.9%

Current

Average

7.3%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

8.9%

Operating Profit

516.9m

Revenue

5.8B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
US		Texas Roadhouse Inc NASDAQ:TXRH	11.5B USD	9%
US		McDonald's Corp NYSE:MCD	225.2B USD	46%
JP		DD Holdings Co Ltd TSE:3073	18.1T JPY	10%
US		Starbucks Corp NASDAQ:SBUX	98B USD	10%
UK		Compass Group PLC LSE:CPG	40.6B GBP	6%
US		Chipotle Mexican Grill Inc NYSE:CMG	50.3B USD	17%
US		Yum! Brands Inc NYSE:YUM	43.4B USD	32%
CA		Restaurant Brands International Inc NYSE:QSR	31.9B USD	26%
IN		Eternal Ltd NSE:ETERNAL	2.6T INR	-2%
US		Darden Restaurants Inc NYSE:DRI	22B USD	12%
CN	M	MIXUE Group HKEX:2097	149.9B HKD	23%

Texas Roadhouse Inc
Glance View

Economic Moat

None

Market Cap

6.5B EUR

Industry

Hotels, Restaurants & Leisure

Texas Roadhouse Inc., founded in 1993 by W. Kent Taylor in Clarksville, Indiana, has carved out a distinctive niche in the casual dining sector. From its humble beginnings, the company has grown to become a beloved national steakhouse chain, renowned for offering an authentic Western dining experience. The establishment prides itself on providing hearty American fare at reasonable prices, focusing on hand-cut steaks, fall-off-the-bone ribs, and freshly baked bread, complete with a bucket of peanuts at every table. What sets Texas Roadhouse apart is its commitment to consistency in quality and service – attributes that resonate well with its customer base. By fostering a lively and welcoming atmosphere infused with country music and energetic line dancing, Texas Roadhouse seeks to create not just meals, but memorable experiences, encouraging repeat visits and strong word-of-mouth promotion. Financially, Texas Roadhouse seizes revenue through its vibrant dine-in operations, which are the backbone of its business model. Each establishment enjoys a local management model, empowering managers to tailor their operations to community preferences while ensuring the overall brand consistency beloved by patrons nationwide. This decentralized approach promotes a sense of ownership and accountability that incentivizes high performance at every location. Additionally, efforts to cultivate a loyal customer base through exceptional service have translated into significant sales figures, augmented by strategically located restaurants that capitalize on high foot traffic and accessible suburban locales. Operational efficiency is further enhanced by effective supply chain management and keen oversight of cost control measures, allowing each restaurant to maximize margins while maintaining value-oriented pricing.

View ROW Analysis

ROW Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

US	Johnson & Johnson NYSE:JNJ	Pharmaceuticals
US	Berkshire Hathaway Inc NYSE:BRK.A	Financial Services
US	Bank of America Corp NYSE:BAC	Banking
US	Mastercard Inc NYSE:MA	Technology
US	UnitedHealth Group Inc NYSE:UNH	Health Care
US	Exxon Mobil Corp NYSE:XOM	Energy
US	Pfizer Inc NYSE:PFE	Pharmaceuticals
US	Palantir Technologies Inc NYSE:PLTR	Technology
US	Nike Inc NYSE:NKE	Textiles, Apparel & Luxury Goods
US	Visa Inc NYSE:V	Technology
CN	Alibaba Group Holding Ltd NYSE:BABA	Retail
US	JPMorgan Chase & Co NYSE:JPM	Banking
US	Coca-Cola Co NYSE:KO	Beverages
US	Walmart Inc NYSE:WMT	Retail
US	Verizon Communications Inc NYSE:VZ	Telecommunication
US	Chevron Corp NYSE:CVX	Energy

	Johnson & Johnson NYSE:JNJ	207.32 USD 0.46%
	Berkshire Hathaway Inc NYSE:BRK.A	750 005.66 USD 0.59%
	Bank of America Corp NYSE:BAC	55.88 USD 1.1%
	Mastercard Inc NYSE:MA	575.7 USD 0.61%
	UnitedHealth Group Inc NYSE:UNH	325.16 USD -0.69%
	Exxon Mobil Corp NYSE:XOM	118.15 USD 1.25%

	Franklin Covey Co NYSE:FC	17 USD 0.71%
	Mohawk Industries Inc NYSE:MHK	108.58 USD 0.65%
	Ardmore Shipping Corp NYSE:ASC	10.79 USD -0.92%
	ASGN Inc NYSE:ASGN	49.06 USD 0.53%
	Skyworks Solutions Inc NASDAQ:SWKS	65.24 USD 0.87%
	Weatherford International PLC NASDAQ:WFRD	80.47 USD 2.08%

	Johnson & Johnson NYSE:JNJ	207.32 USD 0.46%
	Bank of America Corp NYSE:BAC	55.88 USD 1.1%
	Mastercard Inc NYSE:MA	575.7 USD 0.61%
	Salesforce Inc NYSE:CRM	264.63 USD 1.82%
	Abbvie Inc NYSE:ABBV	227.91 USD 0.48%
	Home Depot Inc NYSE:HD	346.39 USD 0.4%

	Monolithic Power Systems Inc NASDAQ:MPWR	945.16 USD 0.86%
	Applovin Corp NASDAQ:APP	733.6 USD 1.7%
	NVIDIA Corp NASDAQ:NVDA	183.69 USD 1.49%
	Cal-Maine Foods Inc NASDAQ:CALM	83.35 USD -2.74%
	Pro Medicus Ltd ASX:PME	228.79 AUD 2.92%
	Lundin Gold Inc TSX:LUG	120.46 CAD 5.95%

Texas Roadhouse Inc
XBER:ROW