What Happened?
Shares of casual restaurant chain Portillo’s (NASDAQ:PTLO) jumped 9.8% in the morning session after the company reported strong fourth-quarter 2024 results, significantly exceeding analysts' EPS expectations despite revenue coming in line with forecasts. EBITDA also outperformed Wall Street's estimates, showing that profitability was better than expected. Overall, we think this was a solid quarter with some key areas of upside.
The shares closed the day at $14.93, up 9.9% from previous close.
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What The Market Is Telling Us
Portillo’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 29 days ago when the stock gained 7.8% on the news that Stifel analyst Chris O'Cull upgraded the stock's rating from Hold to Buy and raised the price target from $13 to $16. The new price target implied a potential 20% upside from where shares traded before the upgrade was announced. O'Cull's optimism stemmed from management's improvement engagement amid efforts to improve traffic trends.
Portillo's is up 60.2% since the beginning of the year, and at $14.85 per share, it is trading close to its 52-week high of $15.90 from February 2024. Investors who bought $1,000 worth of Portillo’s shares at the IPO in October 2021 would now be looking at an investment worth $510.31.
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