El Pollo Loco Holdings (FRA:EP6) GF Value Rank : 7 (As of May. 27, 2024)

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What is El Pollo Loco Holdings GF Value Rank?

El Pollo Loco Holdings has the GF Value Rank of 7.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

Competitive Comparison of El Pollo Loco Holdings's GF Value Rank

For the Restaurants subindustry, El Pollo Loco Holdings's GF Value Rank, along with its competitors' market caps and GF Value Rank data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

El Pollo Loco Holdings's GF Value Rank Distribution in the Restaurants Industry

For the Restaurants industry and Consumer Cyclical sector, El Pollo Loco Holdings's GF Value Rank distribution charts can be found below:

* The bar in red indicates where El Pollo Loco Holdings's GF Value Rank falls into.

El Pollo Loco Holdings GF Value Rank Related Terms

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El Pollo Loco Holdings (FRA:EP6) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Restaurants » El Pollo Loco Holdings Inc (FRA:EP6) » Definitions » GF Value Rank

Comparable Companies

Traded in Other Exchanges

LOCO:USA

Address

3535 Harbor Boulevard, Suite 100, Costa Mesa, CA, USA, 92626

Website

https://www.elpolloloco.com

El Pollo Loco Holdings Inc operates and franchises hundreds of fast-casual chicken restaurants in the United States. Restaurant locations are typically free-standing and include drive-thrus, and menus include many low-priced options. Poultry is the company's largest food cost, accounting for roughly 38% of total food and paper cost, and the company manages that commodity price risk by using multiple suppliers and entering supply contracts of varying lengths depending on market conditions.

El Pollo Loco Holdings (FRA:EP6) Headlines

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