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Texas Roadhouse, Inc. (TXRH) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Texas Roadhouse, Inc. (TXRH)

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Intrinsic Value (DCF)

Current$193.60
→
Intrinsic$174.46
-10%
$115.95$174.46$285.53
Market implies 24% growth for 5 years
TXRH appears fairly valued — current price aligns with our DCF estimate.
At $194, the market prices in continued strong cash flow growth (24%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $116 → Bull $286. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →17%19%21%23%
8%$215$234$253$274
10%$148$161$174$189
12%$111$121$131$142
14%$88$95$103$112

Bull Case

  • Bull case ($286) offers 47% upside at 26% growth, 9% discount

Bear Case

  • Bear case ($116) implies 40% downside at 17% growth, 12% discount
  • Using 21% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$484.48M
Year 2$587.86M
Year 3$713.29M
Year 4$865.49M
Year 5$1.05B
Terminal$15.45B

📐 Model Inputs

Growth Rate21.3%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$399.29MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is TXRH stock undervalued or overvalued?
🟡 FAIRLY VALUED

TXRH trades at $193.60, within 10% of our $165.34 intrinsic value estimate. At 10.0% WACC and 21.3% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $105.32 (bear) to $253.73 (bull).

What is TXRH's intrinsic value?

Using a 5-year DCF model: Base FCF of $399M, projected at 21.3% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $609M net debt and dividing by 0.07B shares: Bear $105.32 | Base $165.34 | Bull $253.73. Current price $193.60 implies -7% to base case.

How is TXRH's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 21.3% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($11.69B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.