Chuy’s Holdings (CHUY) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for Chuy’s Holdings (CHUY) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
Chuy’s Holdings Fundamentals
Stock Price Target: $44.62
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Chuy’s Holdings in comparison to the Restaurant industry and the S&P 500.
Chuy’s Holdings is a Small Cap company with a Market Cap of $507.4M.
How are investors using Chuy’s Holdings earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for Chuy is 11.31%, in comparison to 3.99% for the S&P 500 and 1.75% for the 10-year treasury bond. The median earnings yield for the Restaurant industry is 5.17%.
What does Chuy’s Holdings Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
Chuy is currently trading at a P/E of 19.43. The P/E for the Restaurant industry is 64.69 and the P/E for the S&P 500 is 25.08.
What is the current Price-to-Sales Ratio (P/S) for Chuy’s Holdings?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
Chuy is currently trading at a P/S of 1.43. The P/S for the Restaurant industry is 4.13 and the P/S for the S&P 500 is 3.01.
How does Chuy’s Holdings Price-to-BookRatio (P/B) compare to the Restaurant industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
Chuy P/B ratio is 2.04. The P/B for the Restaurant industry does not currently have a P/B ratio and the P/B for the S&P 500 is 4.54.
How attractive is Chuy’s Holdings Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
Chuy ROIC is currently 5.77% in comparison to 14.72% for the Restaurant industry and 9.10% for the S&P 500.
How has CHUY stock performed over the past year? What is the current analyst price target?
Over the past 52 weeks, Chuy has traded between the range of $22.60 and $49.99.
The current Analyst Price Target for Chuy is $44.62.
What is Chuy’s Holdings YOY Performance in comparison to its industry and the total market?
The YOY performance for Chuy is -26.12%. The Restaurant industry has a YOY performance of 9.29% in comparison to the YOY S&P 500 performance of 16.61%.
Recent Financial Results
- Revenue increased 24.3% to $101.9M compared to $82M in the third quarter of 2020
- Comparable restaurant sales increased 20.5% as compared to fiscal 2020 and decreased approximately 2.4% as compared to fiscal 2019
- Net income increased 112.3% to $6M, or $0.30 per diluted share, compared to net income of $2.8M, or $0.14 per diluted share, in the third quarter of 2020
- Adjusted net income increased 48.8% to $9.1M, or $0.45 per diluted share, compared to $6.1M, or $0.31 per diluted share, in the third quarter of 2020
- Restaurant-level operating profit increased 34.2% to $23.7M compared to $17.7M in the third quarter of 2020
- Cash and cash equivalents of $105.1M and the Company no debt outstanding with $35M available under the revolving credit facility
Stock Price Target: $44.62
Chuy’s Holdings owns and operates full-service restaurants under the Chuy’s name in 17 states, including the Southeastern and Midwestern United States. As of December 2020, it operated 92 restaurants. The company was founded in 1982 and is headquartered in Austin, Texas. The current CEO is Steve Hislop.
This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.