TXRH Should I Buy
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Texas Roadhouse Inc. (TXRH) is not a strong buy at the current moment for a beginner investor with a long-term strategy. While the company has shown revenue growth, its declining net income, EPS, and gross margin, coupled with insider selling and mixed analyst sentiment, suggest limited upside potential. The technical indicators do not signal a clear buying opportunity, and the upcoming earnings report could introduce further volatility. Hold for now and reassess after the earnings report or a price pullback.
The MACD is negative and expanding, indicating bearish momentum. RSI is neutral at 38.356, suggesting no clear overbought or oversold conditions. The stock is trading near a key support level (S1: 179.593), with resistance at 184.88. Converging moving averages indicate a lack of a strong trend.
Analysts from Mizuho and Wells Fargo have raised price targets, indicating confidence in the company's long-term potential. The company's strong value and quality perceptions in full-service dining could support demand.
Insiders are selling heavily, with a 372.68% increase in selling activity over the last month. Truist downgraded the stock, citing beef price inflation and limited upside due to the stock trading near all-time highs. Financial metrics such as net income, EPS, and gross margin have declined YoY. The MACD and other technical indicators suggest bearish momentum.
In Q3 2025, revenue increased by 12.83% YoY to $1.436 billion. However, net income dropped by 1.47% YoY to $83.17 million, EPS declined by 0.79% YoY to 1.25, and gross margin fell by 3.85% YoY to 60.72%.
Analyst sentiment is mixed. While some firms like Mizuho, Wells Fargo, and TD Cowen have raised price targets and maintained positive ratings, others like Truist have downgraded the stock, citing concerns about inflation and limited upside. Price targets range from $185 to $220, with an average around $200.
