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LOCO, El Pollo Loco Holdings Inc.

Restaurants consumer brand Cyclical

Our Loco Rewards loyalty program offers rewards that incentivize customers to visit our restaurants more often each month.

To increase comparable restaurant sales, we plan to increase customer frequency, attract new customers, and improve per-person spend.

System-wide comparable restaurant sales include restaurant sales at all comparable company-operated restaurants and at all comparable franchised restaurants, as reported by franchisees.

Latest annual: FY2025 10-K

LOCO · El Pollo Loco Holdings Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$490M

+3.6% YoY · 3% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $497M 5-yr avg $471M

Operating margin 9.1% 5-yr avg 8.3%

ROIC 7% 5-yr avg 9%

Owner-earnings margin 8% 5-yr avg 6%

Free cash flow margin 5% 5-yr avg 5%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is Services (83%), Franchise (11%) and Franchise Advertising Fee (6%).
Situation: Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Operating margin has run about 8.5% through the cycle, a thin margin, where volume, cost discipline and the price it gets all bear on the result. The operating margin has swung widely — from −2.2% to 9.1% over the years — so the through-cycle figure carries more than any single year, and the worst year more than the best. Read this kind of business on same-store sales and unit economics. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has sat near the cost of capital (median 8%). By owner earnings: roughly 6% of revenue reaches owners as cash, consistently. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Services is 83% of revenue, with Franchise the other meaningful line at 11%.

Revenue by product line, FY2025

Services83%$406M
Franchise11%$52M
Franchise Advertising Fee6%$32M

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMApr 2026
											Income statement
$380M	$402M	$436M	$442M	$426M	$454M	$470M	$469M	$473M	$490M	$497M	RevenueRevenue
9%	10%	12%	9%	8%	9%	8%	9%	10%	10%	10%	SG&A / revenueSG&A/rev
$35M	$7M	($9M)	$38M	$34M	$41M	$30M	$40M	$41M	$42M	$45M	Operating incomeOp. inc.
9.1%	1.7%	−2.2%	8.7%	7.9%	9.1%	6.4%	8.5%	8.7%	8.6%	9.1%	Operating marginOp. mgn
$18M	$9M	($9M)	$25M	$24M	$29M	$21M	$26M	$26M	$26M	$29M	Net incomeNet inc.
41%	5%	—	28%	19%	26%	28%	27%	27%	30%	29%	Effective tax rateTax rate
											Cash flow & returns
$49M	$54M	$45M	$36M	$41M	$52M	$39M	$41M	$47M	$48M	$56M	Operating cash flowOp. cash
$16M	$18M	$18M	$18M	$17M	$15M	$14M	$15M	$16M	$16M	$16M	DepreciationDeprec.
$14M	$26M	$35M	($9M)	($4M)	$5M	($161K)	($3M)	$1M	$228K	$5M	Working capital & otherWC & other
$37M	$36M	$28M	$15M	$7M	$17M	$20M	$21M	$19M	$23M	$29M	CapexCapex
9.8%	9.0%	6.4%	3.5%	1.6%	3.8%	4.2%	4.6%	4.0%	4.6%	5.9%	Capex / revenueCapex/rev
$33M	$36M	$28M	$21M	$34M	$35M	$24M	$25M	$28M	$32M	$40M	Owner earningsOwner earn.
8.7%	8.8%	6.3%	4.7%	7.9%	7.7%	5.1%	5.4%	5.9%	6.6%	8.0%	Owner earnings marginOE mgn
$12M	$17M	$18M	$21M	$34M	$35M	$19M	$19M	$28M	$25M	$27M	Free cash flowFCF
3.1%	4.3%	4.0%	4.7%	7.9%	7.7%	4.0%	4.1%	5.9%	5.2%	5.4%	Free cash flow marginFCF mgn
$0	$0	$981K	$48M	$0	$0	—	$59M	$21M	$2M	—	BuybacksBuybacks
6%	2%	-2%	8%	8%	10%	7%	9%	9%	9%	7%	ROICROIC
7%	3%	-3%	10%	9%	9%	7%	10%	10%	9%	10%	Return on equityROE
											Balance sheet
$2M	$9M	$7M	$8M	$13M	$30M	$20M	$7M	$2M	$6M	$4M	Cash & investmentsCash+inv
$7M	$7M	$10M	$9M	—	—	—	—	—	—	$12M	ReceivablesReceiv.
$2M	$2M	$2M	$2M	$2M	$2M	$2M	$2M	$2M	$2M	$2M	InventoryInvent.
$12M	$12M	$10M	$6M	$7M	$11M	$13M	$13M	$12M	$16M	$10M	Accounts payablePayables
($3M)	($3M)	$3M	$5M	($5M)	($8M)	($10M)	($11M)	($10M)	($14M)	$4M	Operating working capitalOper. WC
$14M	$21M	$22M	$25M	$32M	$50M	$37M	$25M	$20M	$26M	$26M	Current assetsCur. assets
$45M	$47M	$83M	$74M	$66M	$75M	$69M	$73M	$76M	$79M	$76M	Current liabilitiesCur. liab.
0.3×	0.4×	0.3×	0.3×	0.5×	0.7×	0.5×	0.3×	0.3×	0.3×	0.3×	Current ratioCurr. ratio
$249M	$249M	$249M	$249M	$249M	$249M	$249M	$249M	$249M	$249M	$249M	GoodwillGoodwill
$471M	$443M	$450M	$625M	$605M	$614M	$597M	$592M	$592M	$607M	$609M	Total assetsAssets
$105M	$93M	$74M	$97M	$63M	$40M	$66M	$84M	$71M	$51M	$186M	Total debtDebt
$102M	$85M	$67M	$89M	$50M	$10M	$46M	$77M	$69M	$45M	$182M	Net debt / (cash)Net debt
—	—	-2.7×	10.4×	10.2×	22.7×	18.0×	8.3×	7.0×	9.4×	11.3×	Interest coverageInt. cov.
$265M	$275M	$265M	$246M	$278M	$311M	$281M	$251M	$261M	$291M	$302M	Shareholders’ equityEquity
0.3%	0.3%	0.5%	0.6%	0.7%	0.7%	0.7%	0.6%	0.8%	1.1%	1.1%	Stock comp / revenueSBC/rev
											Per share
39.0M	39.1M	38.6M	37.4M	35.8M	36.4M	36.6M	34.4M	30.0M	29.4M	29.7M	Shares out (diluted)Shares
$9.74	$10.28	$11.30	$11.81	$11.90	$12.47	$12.85	$13.63	$15.75	$16.67	$16.74	Revenue / shareRev/sh
$0.47	$0.22	$-0.23	$0.67	$0.68	$0.80	$0.57	$0.74	$0.86	$0.90	$0.98	EPS (diluted)EPS
$0.85	$0.91	$0.72	$0.55	$0.95	$0.96	$0.66	$0.74	$0.92	$1.09	$1.35	Owner earnings / shareOE/sh
$0.30	$0.45	$0.46	$0.55	$0.95	$0.96	$0.51	$0.56	$0.92	$0.87	$0.90	Free cash flow / shareFCF/sh
$0.96	$0.93	$0.72	$0.41	$0.19	$0.47	$0.54	$0.62	$0.64	$0.77	$0.99	Cap. spending / shareCapex/sh
$6.79	$7.03	$6.88	$6.56	$7.75	$8.52	$7.69	$7.29	$8.68	$9.90	$10.19	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+6.2%/yr	+7.0%/yr
Owner earnings / share	+2.8%/yr	+2.9%/yr
EPS	+7.5%/yr	+5.7%/yr
Capital spending / share	−2.4%/yr	+32.7%/yr
Book value / share	+4.3%/yr	+5.0%/yr

The year, in the company's words

the filing →

Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.

Franchise+15.0%
“Franchise Revenue In fiscal 2025, franchise revenue increased $6.8 million, or 15.0% from the prior year. This increase was primarily due to $4.1 million in franchisee IT pass-through revenue related to the franchisee rollout of the new POS system, which was offset by a corresponding increase in franchise expenses.”
✓ figure matches the filed record

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

29Mpeak FY2017

ROIC

9%low FY2018

Net debt ÷ owner earnings

1.4×peak FY2019

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$32Mowner earningsvs.$26Mnet incomelow FY2019

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $32M of owner earnings, the operating cash left after the $16M it takes just to hold its position. It put $7M more into growth; free cash flow, after that spending, was $25M.

Reported net income$26M

Owner earnings$32M · 7% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$26M	$26M	$26M	$21M	$29M
Depreciation & amortizationnon-cash charge added back	+$16M	+$16M	+$15M	+$14M	+$15M
Stock-based compensationreal costnon-cash, but a real cost	+$5M	+$4M	+$3M	+$3M	+$3M
Working capital & othertiming of cash in and out, other non-cash items	+$228K	+$1M	−$3M	−$161K	+$5M
Cash from operations	$48M	$47M	$41M	$39M	$52M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$16M	−$19M	−$15M	−$14M	−$17M
Owner earnings	$32M	$28M	$25M	$24M	$35M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$7M	—	−$6M	−$5M	—
Free cash flow	$25M	$28M	$19M	$19M	$35M
Owner-earnings marginowner earnings ÷ revenue	7%	6%	5%	5%	8%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $16M, roughly its depreciation, the rate its assets wear out). The other $7M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $5M), owner earnings is nearer $27M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 9.4×

Comfortable

Operating income $42M ÷ interest expense $4M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $181M · 4.3× operating profit

Heavy net debt

Cash $6M − debt $187M

What this means
Netting $6M of cash and short-term investments against $187M of debt leaves $181M owed, about 4.3× a year's operating profit (4.5× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 8%

Solid through the cycle

10-yr median, range -2%–10%; 6% latest = NOPAT $30M ÷ invested capital $472M

Industry peers: median 3%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 6% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 6%

Solid through the cycle

10-yr median margin, range 5%–9%; latest $32M = operating cash $48M − maintenance capex $16M

Industry peers: median 6%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 7% of revenue this year, a 6% median across 10 years. It chose to put $7M more into growth, so free cash flow this year was $25M — the gap is investment, not weakness. Treating stock comp as the real expense it is (less $5M of SBC) leaves $27M.
Are earnings backed by cash? 1.82×

Cash-backed

Cash from ops $48M ÷ net income $26M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 179%

Returned more than it generated

Dividends + buybacks $57M ÷ Owner Earnings $32M

What this means
The company returned more than it generated: against $32M of Owner Earnings, $57M (179%) went back to shareholders, $56M dividends, $2M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. But the buybacks barely exceed stock issued to employees ($5M SBC), net of dilution, little was truly returned. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 1.42×

Expanding

Capex $23M ÷ depreciation $16M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 1 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $490M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 0.32×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $187M vs ($53M) WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Near

A profit every year (10-yr record) · 1 loss year

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · 1 of 10 yrs

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +333%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.85/share (latest year $0.87), the averaged base the calculator's gate runs on, and book value is $9.56/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 9 of 10

What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 3% → 9% (3-yr avg ends)

In the filing’s words The filing ties gains to its own pricing, but names price competition too — pricing power that is real yet contested, not unopposed. The margin shows who is winning.

What this means
Through the cycle the operating margin widened — about 3% early to 9% lately, median 8% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth −2%/yr

What this means
Owner earnings shrank about 2% a year over the record.
Worst year 2018 · −2.2% op. margin

What this means
Operations went underwater in 2018, understand why before trusting the good years.
Share count −3.1%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record paid

What this means
Paid a dividend in 1 of the years on record.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Some of our competitors have substantially greater financial and other resources to devote to innovation in products, technology, and market and consumer data analytics, including integration, use, or offering of new technologies, including artificial intelligence.”

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Apr 1, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$26M

Cash & short-term investments$4M
Receivables$12M
Inventory$2M
Other current assets$8M

Current liabilities$76M

Accounts payable$10M
Other current liabilities$66M

Current ratio0.34×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.32×stricter: inventory excluded

Cash ratio0.05×strictest: cash alone against what's due

Working capital($50M)the cushion left after near-term bills

Revenue, latest quarter vs. a year ago+5.9%the freshest read on whether the business is still growing

Current ratio, recent quarters0.3× → 0.3×

Deeper floors

Tangible book value$54Mequity stripped of goodwill & intangibles

Net current asset value($281M)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$231M$187M of it operating leases

Deferred revenue$5Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $451M of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$224M · 50%
Dividends$56M · 12%
Buybacks$131M · 29%
Retained (debt / cash)$41M · 9%

Returned to owners$187M
63% of the owner earnings the business produced over the span, $56M as dividends and $131M as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt rose $81M and cash and short-term investments rose $2M.
Average price paid for buybacks—
Buybacks ran $131M over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−23.9%
The diluted count fell from 39M to 30M, so the buybacks outran the stock issued to staff.
Dividend record$1.52/sh
Paid in 1 of the years on record. It was never cut over the span.
Return on what it retained—
Not read here: owner earnings are negative over the span, or the company returned nearly all its earnings rather than retaining them, so there is too little retained to measure a return on.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill$249M41% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity85%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$0over 10 years buying other businesses, against $224M of capital spent building

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	E. Williams	$1.5M	$1.0M	$35M
2021	E. Williams	$1.7M	−$3.5M	$35M
2022	E. Williams	$1.7M	$1.3M	$24M
2023	E. Williams	$3.2M	$389k	$25M
2023	E. Williams	$983k	$983k	$25M
2024	E. Williams	$4.7M	$5.3M	$28M
2024	E. Williams	$2.1M	$2.4M	$28M
2025	E. Williams	$3.7M	$3.0M	$32M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership3%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$5M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 13% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why El Pollo Loco Holdings Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

3 of the 6 tests turned up something to look into; the other 3 came back clean.

Look hereIs it less profitable than it was?5.9% vs 8.0%
The owner-earnings margin averaged 8.0% early in the record and 5.9% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid debt outgrow the business?$105M → $186M
Debt rose from $105M to $186M while owner earnings went from about $32M to $28M — about 3.3 years of owner earnings in debt then, about 6.5 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
Look hereAre "one-time" charges a yearly habit?9 of 10 years
Management took an impairment or write-down in 9 of the last 10 years, $56M in all. A charge taken almost every year is not one-time; it is the business — past deals coming due, and an admission the assets were worth less than what was paid. Munger's rule: when the "one-time" keeps happening, it is the business. Read it beside the goodwill the company still carries.

And these came back clean

Did the share count rise anyway?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Income taxes, Insurance reserves as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Restaurants

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
DINDine Brands Global Inc.	$879M	63%	17.1%	9%	12%
PTLOPortillo's Inc.	$732M	—	8.2%	7%	6%
WINGWingstop	$697M	80%	25.6%	48%	19%
SGSweetgreen Inc.	$679M	—	-30.2%	-43%	-16%
LOCOEl Pollo Loco Holdings Inc.	$490M	—	8.5%	8%	6%
CNNECannae Holdings Inc.	$424M	15%	-19.4%	-5%	-14%
BHBiglari Holdings Inc.	$395M	57%	5.8%	3%	16%
KRUSKura Sushi USA Inc.	$283M	—	-1.1%	-2%	5%
Group median	—	—	7.0%	5%	6%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what El Pollo Loco Holdings Inc. has delivered.

Today’s price $

Through the cycle, El Pollo Loco Holdings Inc. earns about $32M on its 6.4% median owner-earnings margin. This year’s 6.6% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($32M) Net of stock comp (−$6M) Steady-state · maintenance capex ($40M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+0%/yr

Owner-earnings growth · ’16→’25+7%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $27M on 30M shares outstanding, per the 10-Q cover, as of 2026-05-01; net debt $182M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($29M) runs well above depreciation ($16M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $40M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh LOCO against another business →

The owners of LOCO: the meeting and the votes →

Cite: Owner Scorecard, "El Pollo Loco Holdings Inc. (LOCO), the owner's record," https://ownerscorecard.com/c/LOCO, data as of 2026-07-09.

Manual order: ← LOB its page in the Manual LODE →

Industry order: ← KRUS the Restaurants chapter MB →