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1. Company Snapshot

1.a. Company Description

El Pollo Loco Holdings, Inc., through its subsidiary, El Pollo Loco, Inc., develops, franchises, licenses, and operates quick-service restaurants under the El Pollo Loco name.As of May 04, 2022, the company operated 480 restaurants comprising 189 company-operated and 291 franchised restaurants located in California, Nevada, Arizona, Texas, Utah, and Louisiana.It also licenses one restaurant in the Philippines.


The company was formerly known as Chicken Acquisition Corp.and changed its name to El Pollo Loco Holdings, Inc.in April 2014.


El Pollo Loco Holdings, Inc.was founded in 1975 and is headquartered in Costa Mesa, California.

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1.b. Last Insights on LOCO

El Pollo Loco Holdings, Inc.'s recent performance was driven by strong operational momentum, with restaurant-level margins reaching 18.3% and cost controls supporting an aggressive expansion plan. The company's Q3 earnings beat estimates, with quarterly earnings of $0.27 per share. Analysts see a 33.5% upside potential, citing a positive trend in earnings estimate revisions. Additionally, the company's "12 Days of Pollo" promotional campaign and franchise growth acceleration are expected to drive growth. Its EV-to-EBITDA ratio also stands out as attractive.

1.c. Company Highlights

2. El Pollo Loco’s 2025 Q4: Solid Growth, Strategic Momentum

El Pollo Loco delivered a solid fourth quarter in 2025, posting $123.5 million in total revenue—up 7.1% in company‑operated units and 15.5% in franchised outlets—as noted by management [1]. GAAP net income rose to $6.5 million ($0.22 diluted EPS), while adjusted EBITDA reached $16.9 million, setting the stage for a projected 2026 adjusted EBITDA of $66‑$68 million. The stock trades at a modest P/E of 15.18 and an EV/EBITDA of 11.04, indicating a reasonably priced valuation relative to peers.

Publication Date: Apr -17

📋 Highlights
  • Strong Q4 Revenue Growth: Total revenue reached $123.5 million, with franchise revenue up 15.5% and company-operated revenue rising 7.1% year-over-year.
  • Unit Expansion and Performance: Opened 9 new restaurants in 2025, including 2 new states, with new units averaging $2.0 million in annual revenue.
  • Menu Innovation Momentum: Launched 4 new menu items in 2026, including Double Pollo Salad and Baja Tostadas, while loyalty program participation grew over 20% YoY.
  • Technology and Digital Growth: Upgraded to a cloud-enabled POS system, with digital transaction growth and loyalty revenue increasing by over 20% year-over-year.
  • 2026 Financial Guidance: Targeting adjusted EBITDA of $66–68 million, capital spending of $37–40 million, and plans to open 18–20 new restaurants.

Revenue & Margin Dynamics

Same‑store sales grew modestly, with systemwide comparable store sales increasing 0.1% for the year, driven by a 0.7% lift in average check despite a 0.6% decline in transactions. Restaurant‑level margins improved, reflecting disciplined cost management and a shift toward higher‑margin menu items.

Operational Transformation

The company accelerated its operational overhaul, reducing new‑build costs through its iconic prototype and boosting cash‑on‑cash returns with second‑generation sites. A focus on guest‑serving activities and third‑party measurement has sharpened service quality, reflected in industry‑leading satisfaction scores.

Menu Innovation & Brand Push

El Pollo Loco’s culinary pipeline is a key driver, with permanent additions such as the Double Chicken Street Corn and Queso Crunch burrito bowls. The 2026 launch of the Double Pollo Salad and Baja Double Tostadas has already garnered strong responses, underscoring the brand’s protein‑centric appeal.

Growth & Expansion Plans

In 2025, nine new restaurants opened, including the 500th location in Colorado Springs, and the chain entered Washington and New Mexico, adding nine states to its footprint. Management targets 18‑20 openings in 2026, mainly outside California, with a mix of company‑owned and franchise units.

Financial Health & Capital Allocation

The balance sheet remains solid, with net debt at $45 million and a net debt/EBITDA ratio of 3.99. Cash flow is projected to be strong in 2026, and the firm plans to allocate $37‑$40 million to capital expenditures while exploring shareholder returns.

Guidance & Outlook

Guidance for 2026 calls for 2‑3% systemwide comparable store sales growth, 15‑16 franchised openings, and 3‑4 company‑operated restaurants. The company expects adjusted EBITDA to climb to $66‑$68 million, with continued margin expansion and operational leverage driving higher profitability into 2027 and 2028.

3. NewsRoom

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Chicken Tenders, but Make Them Loco

Apr -23

Source: globenewswire.com

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El Pollo Loco Holdings, Inc. to Announce First Quarter 2026 Results on Thursday, May 7, 2026

Apr -16

Source: globenewswire.com

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El Pollo Loco: Surprising Strength Amid Tough Restaurant Industry Conditions

Mar -31

Source: seekingalpha.com

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El Pollo Loco: Taking Bites Out Of Chipotle

Mar -26

Source: seekingalpha.com

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Winner Winner, Chicken Dinner: El Pollo Loco's Turnaround Recipe

Mar -17

Source: marketbeat.com

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El Pollo Loco® Upgrades Loco Rewards® Program with Experiential Prizes, Including Coca-Cola® x El Pollo Loco Soccer Challenge

Mar -16

Source: globenewswire.com

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Why El Pollo Loco Stock Popped Today

Mar -14

Source: fool.com

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El Pollo Loco Holdings, Inc. (LOCO) Q4 2025 Earnings Call Transcript

Mar -13

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.95%)

6. Segments

Company-operated Restaurant

Expected Growth: 2.0%

Company-operated restaurant growth driven by 1) menu innovation, 2) marketing efforts focusing on value and convenience, 3) remodels and technology upgrades enhancing customer experience, and 4) strategic unit expansion in underserved markets, resulting in a 2.0% growth rate.

Franchise

Expected Growth: 1.8%

El Pollo Loco's 1.8% growth is driven by increasing same-store sales, successful marketing campaigns, and strategic menu innovation. Additionally, the company's focus on digital transformation, including mobile ordering and delivery, has contributed to sales growth. Furthermore, El Pollo Loco's expansion into new markets and remodeling of existing locations have also supported the company's growth momentum.

Franchise Advertising Fee

Expected Growth: 1.5%

El Pollo Loco's 1.5% growth in Franchise Advertising Fee is driven by increasing same-store sales, expansion of digital marketing efforts, and strategic partnerships. Additionally, the company's focus on menu innovation, customer loyalty programs, and targeted advertising campaigns contribute to the growth. Furthermore, the rise of online ordering and delivery services also boosts advertising revenue.

7. Detailed Products

Fire-Grilled Chicken

El Pollo Loco's signature product, made with fresh, never frozen chicken, marinated in a proprietary blend of herbs and spices, then grilled to perfection.

Loco Meals

A variety of meal options that include a fire-grilled chicken entree, along with a side and a drink.

Chicken Salads

Fresh, made-to-order salads featuring El Pollo Loco's fire-grilled chicken, mixed greens, and a variety of toppings.

Tostadas

Crispy corn tortillas topped with fire-grilled chicken, fresh lettuce, and a variety of toppings.

Soups

Creamy and flavorful soups made with El Pollo Loco's fire-grilled chicken and fresh vegetables.

Sides

A variety of sides, including Spanish rice, beans, and vegetables, all made with fresh ingredients.

Desserts

Sweet treats, such as churros and cookies, made fresh in-house.

Catering

El Pollo Loco's catering service, offering a variety of options for events and gatherings.

8. El Pollo Loco Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

El Pollo Loco's menu items are moderately substitutable with other fast-food chains, but the brand's unique flavor profile and value proposition help maintain customer loyalty.

Bargaining Power Of Customers

Customers have some bargaining power due to the competitive fast-food market, but El Pollo Loco's strong brand reputation and customer loyalty mitigate this force.

Bargaining Power Of Suppliers

El Pollo Loco has a diversified supplier base, reducing dependence on individual suppliers and minimizing their bargaining power.

Threat Of New Entrants

While new entrants can potentially disrupt the market, El Pollo Loco's established brand and operational efficiency create barriers to entry.

Intensity Of Rivalry

The fast-food industry is highly competitive, with many established players vying for market share, making rivalry intense.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 29.25%
Debt Cost 3.95%
Equity Weight 70.75%
Equity Cost 10.81%
WACC 8.80%
Leverage 41.34%

11. Quality Control: El Pollo Loco Holdings, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Nathan's Famous

A-Score: 6.8/10

Value: 5.5

Growth: 6.6

Quality: 7.0

Yield: 7.0

Momentum: 7.5

Volatility: 7.0

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Dine Brands

A-Score: 5.3/10

Value: 7.5

Growth: 3.3

Quality: 5.0

Yield: 9.0

Momentum: 3.0

Volatility: 4.3

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FAT Brands

A-Score: 5.0/10

Value: 10.0

Growth: 3.3

Quality: 5.1

Yield: 10.0

Momentum: 0.0

Volatility: 1.3

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The Cheesecake Factory

A-Score: 4.9/10

Value: 4.6

Growth: 4.9

Quality: 4.7

Yield: 4.0

Momentum: 5.0

Volatility: 6.3

1-Year Total Return ->

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Papa John's

A-Score: 4.8/10

Value: 6.0

Growth: 4.6

Quality: 4.7

Yield: 6.0

Momentum: 3.5

Volatility: 4.0

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El Pollo Loco

A-Score: 4.5/10

Value: 5.8

Growth: 4.7

Quality: 4.4

Yield: 3.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.07$

Current Price

13.07$

Potential

-0.00%

Expected Cash-Flows