Shareholders might have noticed that El Pollo Loco Holdings, Inc. (NASDAQ:LOCO) filed its quarterly result this time last week. The early response was not positive, with shares down 6.3% to US$11.96 in the past week. It looks like a credible result overall - although revenues of US$120m were what the analysts expected, El Pollo Loco Holdings surprised by delivering a (statutory) profit of US$0.21 per share, an impressive 26% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for El Pollo Loco Holdings from four analysts is for revenues of US$490.1m in 2025. If met, it would imply a satisfactory 4.1% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 19% to US$0.95. Before this earnings report, the analysts had been forecasting revenues of US$493.3m and earnings per share (EPS) of US$0.93 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$14.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values El Pollo Loco Holdings at US$15.00 per share, while the most bearish prices it at US$13.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting El Pollo Loco Holdings is an easy business to forecast or the the analysts are all using similar assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting El Pollo Loco Holdings' growth to accelerate, with the forecast 3.2% annualised growth to the end of 2025 ranking favourably alongside historical growth of 2.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.6% per year. So it's clear that despite the acceleration in growth, El Pollo Loco Holdings is expected to grow meaningfully slower than the industry average.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around El Pollo Loco Holdings' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for El Pollo Loco Holdings going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with El Pollo Loco Holdings , and understanding this should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
