1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Metrics vs Peers
3. Price Chart
4. Valuation
5. Offer Terms
6. Financial Statements
Discussion
Research report, target price, DCF and forensic scores are for subscribers. View plans
Symbol
PTLO
Listed on
2021-10-21
Sector
Consumer
Subsector
Hotels, Restaurants & Leisure
Offer Range
$17.00-$20.00
Shares Offered
20.27M
35.81M
$1.4B
56.6%
Implied Upside vs Midpoint
Description
Portillo’s serves iconic Chicago street food through high-energy, multichannel restaurants designed to ignite the senses and create a memorable dining experience. Since our founding in 1963 in a small trailer which Dick Portillo called “The Dog House,” Portillo’s has grown to become a treasured brand with a passionate (some might say obsessed) nationwide following. Our diverse menu features all-American favorites such as Chicago-style hot dogs and sausages, Italian beef sandwiches, chopped salads, burgers, crinkle-cut french fries, homemade chocolate cake and milkshakes. We create a consumer experience like no other by combining the best attributes of fast casual and quick service concepts with an exciting energy-filled atmosphere and restaurant model capable of generating tremendous volumes. Nearly all of our restaurants were built with double lane drive-thrus and have been thoughtfully designed with a layout that accommodates a variety of access modes including dine-in,carryout/curbside, delivery and catering in order to quickly and efficiently serve our guests. As of June 27, 2021, we owned and operated 67 Portillo’s restaurants across nine states. According to data gathered by The NPD Group, our restaurants generated higher AUVs and Restaurant-Level Adjusted EBITDA Margins than any other fast casual restaurant concept of $7.7 million and 26.8% in 2020, respectively. For the twelve months ended June 27, 2021, our restaurants generated AUVs of $7.9 million and Restaurant-Level Adjusted EBITDA Margins of 28.6%. No matter how our guests order from us, our highly productive kitchens and team members consistently serve high-quality food and deliver a memorable guest experience. We believe the combination of our craveable food, multichannel sales model, dedication to operational excellence, and a distinctive culture driven by our team members gives us a competitive advantage and allows us to generate the highest AUVs and traffic per restaurant among fast casual and quick service restaurants. In 2019, 2020 and for the twelve months ended June 27, 2021, the average Portillo’s restaurant generated: • Drive-thru sales of $3.4 million in 2019, $4.6 million in 2020 and $4.9 million in the twelve months ended June 27, 2021, more than double the throughput of McDonald’s 2019 average drive thru and more than triple their 2020 and twelve months ended second quarter of 2021 average drive thru; • Dine-in sales of $4.4 million in 2019, $1.9 million in 2020 and $1.9 million in the twelve months ended June 27, 2021, greater than Chipotle’s 2019 total AUV of $2.2 million, approximately 90% of their 2020 total AUV and approximately 75% of their twelve months ended second quarter of 2021 total AUV; and • Delivery sales of approximately $500,000 in 2019, nearly $800,000 in 2020 and approximately $850,000 in the twelve months ended June 27, 2021, which is approximately 80% of Domino’s 2019 average delivery volume, approximately equal to their 2020 average delivery volume and higher than their twelve months ended second quarter of 2021 delivery volume. Each Portillo’s location on average served approximately 800,000 guests in 2020 and approximately 825,000 guests in the twelve months ended June 27, 2021, based on our average per-guest spend of approximately $9.60 and our AUVs of approximately $7.7 million in 2020 and $7.9 million in the twelve months ended June 27, 2021. Our restaurants are buzzing with the energy and excitement of our team members and guests that bring everyone together, from single diners to large groups, around great food, drinks and fun. Our restaurants have attracted a growing cult-like following that has enabled us to thrive across a variety of suburban and urban trade areas around the country. All of our restaurants are profitable, and we are proud to have never closed a restaurant in our 58-year history. --- We believe our unique brand experience, passionate following, and compelling everyday value proposition drive strong operating results, as illustrated by the following: • Opened 15 new restaurants across 8 states from January 1, 2018 through June 27, 2021 • Grew operating income from $46 million in fiscal 2018 to $57 million in fiscal 2020 (operating income for the two quarters ended June 27, 2021 was $35 million compared to $23 million for the two quarters ended June 28, 2020) • Grew our industry-leading Restaurant-Level Adjusted EBITDA Margin by 190 basis points from 24.9% in fiscal 2018 to 26.8% in fiscal 2020 (our Restaurant-Level Adjusted EBITDA Margin was 28.2% for the two quarters ended June 27, 2021 compared to 24.3% for two quarters ended June 28, 2020) • Grew net income from $5 million in fiscal 2018 to $12 million in fiscal 2020 (net income for the two quarters ended June 27, 2021 was $14 million as compared to a net loss of $733 thousand for the two quarters ended June 28, 2020) • Grew Adjusted EBITDA from $75 million in fiscal 2018 to $88 million in fiscal 2020 (our Adjusted EBITDA was $51 million for the two quarters ended June 27, 2021 compared to $38 million for the two quarters ended June 28, 2020) --- Portillo’s Inc. was incorporated in Delaware on June 8, 2021. Our principal executive offices are located at 2001 Spring Road, Suite 400, Oak Brook, IL 60523, and our telephone number is (630) 954-3773. Our corporate website address is www.portillos.com.
| Metric | Value | Peer median | Among peers | Trend |
|---|---|---|---|---|
EV / revenue | 4.1x | 6.0x | ||
Revenue growth | -5.0% | 20.8% | ||
Operating margin | 12.6% | 3.7% | ||
Net margin | -0.1% | -4.5% | ||
Free cash flow margin | 8.1% | -2.4% | ||
Rule of 40 | 13.0% | 26.7% | ||
Net cash / market cap | -30.0% | 0.0% | ||
Debt / equity | 3.34 | 0.13 | ||
Current ratio | 0.82 | 0.64 | ||
Stock comp / revenue | 0.2% | 0.7% | ||
9 premium metrics: DCF value / price, Growth the price needs: how common, Last 12 months vs full year and 6 more Unlock | ||||
▲ Priced at $20.00, 8% above the midpoint of the first filed range ($17.00–$20.00, 2021-10-12).
Each filing is plotted ahead of the first trading day on the price chart.
| Filed | Form | Price range | Price | Shares offered | Deal size |
|---|---|---|---|---|---|
| 2021-10-12 | S-1/A | $17.00–$20.00 | — | 20,270,270 | $375.0M |
| 2021-10-20 | S-1/A | $17.00–$20.00 | — | 20,270,270 | $375.0M |
| 2021-10-22 | 424B4 | — | $20.00 | 20,270,270 | $405.4M |
Portillo's Inc. income statement and balance sheet, FY Dec 2022 to FY Dec 2025, as reported in SEC filings.
| Metric | FY Dec 2022after listing | FY Dec 2023after listing | FY Dec 2024after listing | FY Dec 2025after listing |
|---|---|---|---|---|
| Revenue | $587M | $680M | $711M | $732M |
| Operating income | $41.3M | $55.4M | $58.0M | $43.7M |
| Net income | $10.9M | $18.4M | $29.5M | $19.3M |
| Revenue growth | — | 15.8% | 4.5% | 3.0% |
| Operating margin | 7.0% | 8.2% | 8.2% | 6.0% |
| Net margin | 1.8% | 2.7% | 4.2% | 2.6% |
| Metric | FY Dec 2022after listing | FY Dec 2023after listing | FY Dec 2024after listing | FY Dec 2025after listing |
|---|---|---|---|---|
| Total assets | $1.3B | — | $1.5B | $1.6B |
| Total liabilities | $847M | — | $1.0B | $1.1B |
| Total equity | $433M | $460M | $490M | $497M |
| Cash & equivalents | $44.4M | $10.4M | $22.9M | $20.0M |