TXRH is a buy; recent stock decline is due to temporary beef cost inflation, but underlying growth metrics are solid.

Texas Roadhouse is another company that I want to highlight that I think is a buy today. The stock price would make you believe that there's something dramatically wrong with the stock because it just sold off a lot.

It went down 21% in the past month. So, this one continues to tank. Meanwhile, the fundamentals look strong. The revenue continues growing. The number of restaurants are increasing.

The average weekly sales, the same store sales are increasing. The to-go business is increasing.

The reason the stock is down is because the earnings are not going to be growing over the past year. In fact, there's a 5% decline in EPS. The reason why is because of commodity inflation.

Beef prices go up. Texas Roadhouse holds their prices the same, which means that their net income goes down. Their net income is down like 16% because of commodity price inflation of beef.

Now, what Texas Roadhouse doesn't do is they don't say that beef prices are going up, so let's just jack up our prices. They don't do that because that destroys customer trust.

People want stable price increases. They want slow price increases. They don't want a company that immediately bumps up prices quickly. So, Texas Roadhouse is playing the long game.

They'll take a temporary hit in EPS growth, but then when beef prices go down, their net income goes up like crazy.