PTLO - Portillo's: Valuation Improving After The Drop

• Portillo's released its Q1 results last month, reporting quarterly revenue of $134.5 million, representing a 15% increase from the year-ago period.
• While the sales growth was solid and the industry-leading unit growth outlook remains intact, margins came under pressure, putting a dent in previous EBITDA estimates.
• While the company appears to have strong brand loyalty and should have the pricing power to mitigate this pressure, the valuation still leaves a lot to be desired.
• Hence, while I think Portillo's is a name to keep a close eye on, especially given its significant white space opportunity, I think there are safer values elsewhere in the sector currently.

For further details see: