Download PDF

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.

Show Full description

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 Q3 2025 Earnings: A Strong Performance

El Pollo Loco's third-quarter 2025 financial performance was marked by a total revenue of $121.5 million, a 0.8% increase from the third quarter of 2024. The company's restaurant contribution margin improved to 18.3% compared to 16.7% in the year-ago period. Earnings per share (EPS) came in at $0.27, beating analyst estimates of $0.23. The company's ability to deliver margin expansion and beat EPS estimates is a testament to its operational enhancements and menu innovations.

Publication Date: Nov -19

📋 Highlights
  • Unit Economics Growth: Restaurant-level operating profit margins rose 160 bps YoY to 18.3%, driven by supply chain cost savings and labor productivity improvements.
  • Digital Sales Expansion: Digital sales (kiosks, app) grew to 27% of system sales (20% in Q3 2024), with loyalty transactions up 28% YoY and customer frequency increasing 15%.
  • Franchise Revenue Surge: Franchise revenue jumped 13.5% YoY to $12.9M, fueled by 5 new franchise openings and a $900K IT pass-through revenue increase.
  • Brand Campaign Impact: Customer satisfaction scores rose, complaints hit a 3-year low, and the "Let’s Get Loco" campaign drove social media engagement via AI Chicken Challenge and influencer partnerships.
  • Unit Development Momentum: Achieved 500th restaurant in Colorado Springs, with plans to open 10+ new units in 2025 and remodels delivering mid-single-digit sales lifts.

Operational Highlights

The company's operational enhancements are contributing to its success, with a mid-single-digit uplift in sales from its new remodel image. The remodels, which have received positive customer feedback, are expected to continue driving sales growth. El Pollo Loco's hospitality mindset pillar remains central to its transformation effort, with a focus on quality of service matching that of food quality. Initiatives such as reinforcing standards and accountability, deploying tools and systems to simplify operations, and improving customer experience with the Loco Love service model have contributed to substantial progress in customer engagement metrics.

Digital Transformation

The company's digital-first pillar continues to gain momentum, with loyalty transactions up 28% year-over-year and frequency of this customer up 15%. The digital business, including kiosks, grew to 27% of system sales compared to 20% in the same period last year. The company has made meaningful improvements to its app and kiosk experiences, making it easier for Loco Rewards members to add points to their orders and customize their meals.

Unit Growth and Development

El Pollo Loco successfully opened its 500th restaurant in Colorado Springs and plans to open multiple new restaurants in December to end the year with at least 10 new restaurants in 2025. The company expects its second-generation sites to continue to be a significant part of its unit development going forward, aided by its flexible unit design.

Valuation Metrics

With a P/E Ratio of 11.62 and an EV/EBITDA of 8.65, El Pollo Loco's valuation appears reasonable. The company's ROE of 9.56% and ROIC of 5.43% indicate a decent return on equity and invested capital, respectively. Analysts estimate next year's revenue growth at 1.9%, which, combined with the company's current valuation, suggests that the stock may be fairly priced.

3. NewsRoom

Card image cap

El Pollo Loco Is Celebrating “12 Days of Pollo” with Delicious Deals

Nov -26

Source: globenewswire.com

Card image cap

Wall Street Analysts See a 33.5% Upside in El Pollo Loco (LOCO): Can the Stock Really Move This High?

Nov -20

Source: zacks.com

Card image cap

Tap These 5 Bargain Stocks With Enticing EV-to-EBITDA Ratios

Nov -18

Source: zacks.com

Card image cap

Wall Street Analysts See a 35.92% Upside in El Pollo Loco (LOCO): Can the Stock Really Move This High?

Nov -04

Source: zacks.com

Card image cap

El Pollo Loco: The Dark Horse Of Small-Cap Restaurants

Nov -03

Source: seekingalpha.com

Card image cap

El Pollo Loco: Feathers Flying High

Nov -02

Source: seekingalpha.com

Card image cap

El Pollo Loco Holdings, Inc. (LOCO) Q3 2025 Earnings Call Transcript

Oct -31

Source: seekingalpha.com

Card image cap

El Pollo Loco (LOCO) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Oct -31

Source: zacks.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

Stock-Card
Nathan's Famous

A-Score: 6.4/10

Value: 4.9

Growth: 6.6

Quality: 7.0

Yield: 4.0

Momentum: 9.0

Volatility: 7.0

1-Year Total Return ->

View Full Report
Stock-Card
The Cheesecake Factory

A-Score: 6.0/10

Value: 5.3

Growth: 5.0

Quality: 6.6

Yield: 4.0

Momentum: 8.5

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Dine Brands

A-Score: 5.6/10

Value: 8.8

Growth: 3.3

Quality: 5.1

Yield: 9.0

Momentum: 3.0

Volatility: 4.3

1-Year Total Return ->

View Full Report
Stock-Card
FAT Brands

A-Score: 5.3/10

Value: 10.0

Growth: 3.3

Quality: 5.6

Yield: 10.0

Momentum: 0.0

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
Papa John's

A-Score: 4.9/10

Value: 5.7

Growth: 4.6

Quality: 4.5

Yield: 6.0

Momentum: 4.5

Volatility: 4.0

1-Year Total Return ->

View Full Report
Stock-Card
El Pollo Loco

A-Score: 4.3/10

Value: 7.0

Growth: 4.7

Quality: 4.0

Yield: 3.0

Momentum: 1.0

Volatility: 6.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11.25$

Current Price

11.26$

Potential

-0.00%

Expected Cash-Flows