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Chuy's Earnings: An Early Look

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Earnings season is now starting to wind down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Chuy's Holdings (NASDAQ: CHUY  ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.

As a new entrant to the markets after its summer IPO, Chuy's has seen its shares get as hot as a jalapeno during the past six months. But can the good times last for the highly valued, debt-laden restaurant chain? Let's take an early look at what's been happening with Chuy's over the past quarter, and what we're likely to see in its quarterly report next Monday.

Stats on Chuy's

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$46.7 million

Change From Year-Ago Revenue


Earnings Beats in Past 2 Quarters Since IPO


Source: Yahoo! Finance.

Will Chuy's spice up its earnings?
Analysts have seen Chuy's shares as being increasingly appetizing over the past few months, as they've increased their earnings projections by $0.03 per share. The stock has stayed spicy, as well, rising 25%, just since mid-November.

We've already gotten a taste of how the quarter would look, when Chuy's gave preliminary numbers in January. Not only is revenue soaring, but the company gave an extremely positive outlook for 2013, with earnings expected to rise to a range of $0.66 to $0.69 per share. That still leaves the stock with a forward earnings multiple above 40, but massive expansion should lead to a growth rate that, at least arguably, supports that valuation.

Recently, expert investors have questioned whether high-growth stories in the Mexican food space really have an advantage over more bargain-priced alternatives. Chipotle Mexican Grill (NYSE: CMG  ) was the poster child for fast-growth food plays in the burrito industry until last summer, when growth inexorably slowed. That led value guru David Einhorn to opine, in defense of his Chipotle short position, that Yum! Brands' (NYSE: YUM  ) Taco Bell might be a better player in the space than Chipotle.

Chipotle has continued to grow, and plans to expand on its ShopHouse Asian Kitchen concept, and Taco Bell is looking for international expansion, as well as competing better on the domestic front. Yet, Chuy's has a lot more growth ahead of it than either of those two companies. Even with its extensive debt, Chuy's looks like the best play for true high-growth investors.

In its earnings report, look for Chuy's to detail its expansion plans. The key to a stock like Chuy's maintaining its momentum is for it to show accelerating success. Even at a premium price, the right growth outlook for 2013 and beyond could send shares even higher.

Can Chuy's overtake Chipotle?
Chipotle's 2012 implosion sent tremors throughout the Mexican food space. The question remains: Can Chipotle still grow? Find out in our premium research report on the stock, which includes in-depth analysis of Chipotle and its competitors. If you're trying to decide whether Chipotle or Chuy's is the better buy, you'll want to click here now and get started! 

Click here to add Chuy's to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

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Related Tickers

9/30/2016 4:00 PM
CHUY $27.94 Up +0.08 +0.29%
Chuy's Holdings CAPS Rating: ****
CMG $423.50 Up +2.77 +0.66%
Chipotle Mexican G… CAPS Rating: ****
YUM $90.81 Up +1.00 +1.11%
Yum! Brands CAPS Rating: ****