LOCOEl Pollo Loco Holdings, Inc.
Is the business good?
A genuinely good business: earnings fully cash-backed (2.0×) and margins widening.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
A balanced mix of margins, efficiency, and leverage. ROE 10% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is LOCO?
El Pollo Loco Holdings, Inc. earns 12% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 3.5 points above what the capital costs: growth creates value
- Operating margin
- 11%
Operating margin · Restaurants median 7.8% · 12 months to Q2 2026
- Cash conversion
- 1.98×
Cash conversion · 1.32× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- +2.8%
Share count, year on year · shareholders own a smaller slice than a year ago
| Year | Operating margin |
|---|---|
| FY2020 | 7.9% |
| FY2021 | 9.1% |
| FY2022 | 6.4% |
| FY2023 | 8.5% |
| FY2024 | 8.7% |
| FY2025 | 8.6% |
Details›
- Operating margin12 months to Q2 2026
- 11%
- Net margin12 months to Q2 2026
- 7.0%
- Free cash flow margin
- 8.2%
- Revenue, trailing twelve months
- $501M
- Free cash flow, trailing twelve months
- $41M
- Net income, trailing twelve months
- $35M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 12%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.