Texas Roadhouse Inc (TXRH) is slightly overvalued and Yum China Holdings Inc (YUMC) is undervalued.
Against our estimates of intrinsic value, YUMC trades at the wider discount: a margin of safety of +23%, against -20% for TXRH.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 8.9% (average of 3 methods) values the shares at $138.80; the price of $166.12 is 20% above that value, and 77% of that value comes from beyond year five.
Leak Score 59/100 on 3 of 12 signals
Discounting its cash flows at 8.7% (average of 3 methods) values the shares at $54.25; the price of $41.58 is 23% below that value, and 77% of that value comes from beyond year five.
Leak Score 100/100 on 3 of 12 signals
| Metric | TXRH | YUMC |
|---|---|---|
| Verdict | Slightly overvalued | Undervalued |
| Price | $166.12 | $41.58 |
| Intrinsic value | $138.80 | $54.25 |
| Margin of safety | -20% | +23% |
| Leak Score | 59/100 (3/12) | 100/100 (3/12) |
| Market cap | $10.9B | $14.2B |
| Revenue growth, 5 years | 19.6% | 7.4% |
| Operating margin | 8.2% | 12.5% |
| Net margin | 6.6% | 7.8% |
| Return on equity | 27.5% | 17.5% |
| Debt to equity | 0.70 | 0.43 |
| P/E | 26.6x | 15.3x |
| Forward P/E | 21.3x | 12.4x |
| P/B | 7.0x | 2.7x |
| Dividend yield | 1.8% | 2.7% |