William Blair analyst Sharon Zackfia reiterated a Market Perform rating on El Pollo Loco (NASDAQ: LOCO)

The analyst commented, "El Pollo Loco’s fourth-quarter adjusted EPS rose 24% to $0.25, nicely ahead of our/consensus expectations with the upside versus our model stemming from better-than-expected restaurant-level margin and lower-than-expected franchise expenses. Systemwide comps rose 2.1% (0.4% company-owned and 3.3% franchised), similar to trends through the first half of the quarter... While we are encouraged by El Pollo Loco’s progress, we maintain our Market Perform rating at 11 times our new 2026 adjusted EPS estimate as investments weigh on profit growth this year ahead of an inflection into more meaningful EPS growth that will be more reliant on accelerating expansion. Risks include geographic concentration in L.A., a limited history of growth outside California, high exposure to chicken costs, ongoing pressure from wage inflation, and an intense competitive environment."

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Shares of El Pollo Loco closed at $10.88 yesterday.