Texas Roadhouse heads into late May with its stock up 14% over the past month, a wall of analyst upgrades behind it, and options traders positioned in a way that tells an unusually bullish story for a casual-dining name.
The clearest driver of the current setup is the May 7 earnings result. The stock jumped 11% on the day and held almost all of those gains over the following week, an unusually clean post-earnings outcome. That move pulled short interest sharply higher in percentage terms — SI % of Free Float climbed from roughly 4.6% before the print to 5.7% in the days that followed, as shorts added to positions against the rally. Over the past week, however, that pressure has begun to ease. SI has drifted back to 5.7% of the float and is down fractionally on the week. The borrow market reflects little urgency: cost to borrow has dropped 30% over the week to just 0.36%, and availability is extraordinarily loose at over 6,000% of short interest — there is no squeeze dynamic anywhere in the lending data.
Options tell the opposite story from the shorts. The put/call ratio has fallen to 0.28, almost a full standard deviation below its 20-day average of 0.46. For most of April and early May the ratio was running between 0.5 and 0.77; since the earnings beat it has compressed to levels near the 52-week low of 0.26. Call demand is dominating. That is a significant shift in market positioning and it aligns with the stock's 5% gain on the week — is outperforming most casual-dining peers, with close correlates and gaining 8% and 14% respectively but from lower valuation bases where relief-rally math is easier.
The Street is increasingly on board, though the picture is not unanimous. TD Cowen raised its target to $205 this week, maintaining Buy, and several other firms lifted targets through the teens and early $180s after the print. RBC upgraded to Outperform with a $210 target. The cluster of bulls sits with targets in the $192–$210 range; the more cautious names — JP Morgan at Neutral and $188, Stifel and BMO at hold with targets near $180 — acknowledge the quality of the business but flag that the stock is now priced for it. The consensus mean target is $197, roughly 8% above the current price. P/E has expanded to 26.4x on a 30-day basis, up nearly 3 turns over the past month as the stock re-rated after earnings. Factor scores reinforce the quality case: the dividend-score percentile ranks at 99, forward EPS growth momentum at 77, and analyst recommendation differential at 98 — meaning the consensus direction of travel continues to skew positive relative to the broader universe.
The bear case centers on beef. The company faces ongoing commodity inflation risk, and bulls' confidence in pricing power and margin management will be tested again at the July 30 earnings print. Insiders have not exactly been loading up: every recent trade in the database is a sale, with the independent chairman and the president among those trimming positions in the $170s and $180s since March. None of the transactions are large enough in percentage-of-company terms to suggest fundamental concern, but the one-sided insider flow is worth tracking as the stock approaches multi-month highs.
The July 30 print is the next real test — whether margin guidance holds up against beef-cost headwinds as the stock now trades at a premium multiple with the options market already priced for continued good news.
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