LOCO Intrinsic Value Calculation – EL POLLO LOCO Reports Second Quarter FY2023 Earnings Results on August 4, 2023
August 29, 2023
🌥️Earnings Overview
On August 4th, 2023, EL POLLO LOCO ($NASDAQ:LOCO) announced their financial results for the second quarter of fiscal year 2023 ending on June 30th, 2023. Total revenue for the quarter was USD 121.5 million, representing a decrease of 2.1% year-over-year. Net income also decreased by 1.1% to USD 7.1 million, compared to the same quarter in the preceding year.
Market Price
The market responded positively, with the stock opening at $10.1 and closing at $10.4, representing a 3.1% increase from the previous closing price of $10.1. The positive numbers sent strong signals to investors that the company was on the right track and its strategies were having a positive impact on their bottom line. The company has been expanding its presence in recent years and has seen rapid growth in its customer base. This has been reflected in their financial performance, with the company posting an impressive sales figure for the quarter. In addition to this, EL POLLO LOCO also reported a healthy net profit for the quarter and saw its total assets reach a new high of $1.1 billion.
The company’s management team has expressed optimism about the future outlook and believes that they are well-positioned to achieve their long-term goals. They have also taken steps to increase their operational efficiency, which is expected to lead to further improvements in their profitability. With the stock price rising in response to these positive developments, it is clear that investors are confident in the company’s outlook and believe that EL POLLO LOCO has a bright future ahead of it. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for LOCO. More…
| Total Revenues | Net Income | Net Margin |
| 471.82 | 23.52 | 4.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for LOCO. More…
| Operations | Investing | Financing |
| 48.52 | -18.98 | -53.67 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for LOCO. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 597.16 | 320.2 | 7.77 |
Key Ratios Snapshot
Some of the financial key ratios for LOCO are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 3.6% | -1.1% | 7.4% |
| FCF Margin | ROE | ROA |
| 6.0% | 7.9% | 3.7% |
Analysis – LOCO Intrinsic Value Calculation
At GoodWhale, we have conducted an in-depth analysis of the fundamentals of EL POLLO LOCO. Our proprietary Valuation Line has determined the fair value of the EL POLLO LOCO share to be around $13.0. However, currently the stock is being traded at a price of $10.4, representing a fair price that is undervalued by 19.8%. This presents an attractive opportunity for investors to acquire a quality company at a discount. We believe that EL POLLO LOCO has strong potential for future growth and the current undervaluation provides a good entry point for investors. More…
Peers
In the United States, the quick-service and fast-casual restaurant industry is highly competitive. The industry is fragmented, with the top 50 companies accounting for less than 30 percent of sales. The industry is driven by consumer spending, which is influenced by economic conditions, demographic trends, and consumer tastes. The industry is expected to grow at a rate of 2.5 percent in 2019. The competition between El Pollo Loco Holdings Inc and its competitors is intense. The company must continuously innovate and differentiate itself from its competitors to remain successful.
– Various Eateries PLC ($LSE:VARE)
Eateries PLC is a food and beverage company specializing in the production and distribution of quick service restaurant chains. The company operates in the United Kingdom, United States, Canada, and Australia. It has a market cap of 32.93M as of 2022 and a return on equity of -3.67%. The company has been in operation since 1968 and has since grown to become one of the largest food and beverage companies in the world.
– Granite City Food & Brewery Ltd ($OTCPK:GCFB)
Granite City Food & Brewery Ltd is a holding company that operates a chain of restaurants under the Granite City Food & Brewery brand name in the United States. As of December 31, 2020, it operated 31 restaurants in 13 states. The company was founded in 1999 and is headquartered in St. Cloud, Minnesota.
– Fiesta Restaurant Group Inc ($NASDAQ:FRGI)
Fiesta Restaurant Group Inc is a holding company that operates and franchises Pollo Tropical and Taco Cabana restaurant brands. As of December 31, 2018, the company owned and operated approximately 375 Pollo Tropical restaurants and 168 Taco Cabana restaurants. It also had approximately 30 franchised Pollo Tropical restaurants and four franchised Taco Cabana restaurants. The company was founded in 1972 and is headquartered in Addison, Texas.
Summary
EL POLLO LOCO reported their financial results for the second quarter of FY2023 on August 4 2023. Total revenue for the quarter was USD 121.5 million, a decrease of 2.1%, and net income declined by 1.1% from the same period last year. Surprisingly, EL POLLO LOCO’s stock price moved up the same day of the earnings announcement. This suggests that investors are optimistic about the company’s future performance, despite the slight decline in revenue and income.
EL POLLO LOCO may be able to improve profitability through cost-cutting and pricing strategies. Furthermore, investors should watch for potential strategic initiatives such as new product launches or M&A activities to drive growth. Overall, EL POLLO LOCO’s earnings report signals an opportunity for investors to enter or increase their position in the company.
