From a valuation perspective, BJ's Restaurants, Inc. BJRI stock remains attractive. The company is trading at a notable discount to its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 18.04X compared with the industry average of 26.42X and the broader Retail-Wholesale sector’s 22.63X.

The stock also remains attractively valued compared with other industry players like Shake Shack Inc. SHAK, Dutch Bros Inc. BROS and First Watch Restaurant Group, Inc. FWRG.

BJ's Restaurants P/E Ratio (Forward 12 Months)

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BJRI Stock Slips 10% in a Month

In the past month, the stock has lost 9.6% compared with the industry’s and the S&P 500’s declines of 2.1% and 3.3%, respectively. However, in the same time frame, BJRI stock has outperformed other industry players like Shake Shack, Dutch Bros and First Watch Restaurant.

The BJRI stock's recent decline can be primarily attributed to high costs and uncertain macroeconomic conditions. Inflation has affected the company's operations, restaurant development and the corresponding return on invested capital.

BJRI Stock’s 1-Month Price Performance

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Despite the stock's recent decline, the company’s robust fundamentals and analysts' upward earnings estimate revisions suggest a turnaround on the horizon. Let us delve deeper.

Factors Likely to Aid BJRI

The company is benefiting from sales-building efforts, remodeling, menu innovation and expansion initiatives.

BJ’s Restaurants continues to progress on its sales-building initiatives while focusing on productivity and cost savings. It anticipates growth in sales and margins, leveraging its long-term strategy and strong consumer appeal to enhance shareholder value.

BJRI is actively working on initiatives to increase sales by prioritizing guests’ dining experience. They are implementing measures to enhance dining room and kitchen operations, including improved hospitality procedures and kitchen systems. These efforts aim to boost net promoter scores, drive sales and improve operational efficiencies.

BJ’s Restaurants continues to prioritize maintaining a fresh and inviting atmosphere, which has long been a key differentiator for the brand. In 2025, the company intends to focus on refreshing the restaurant footprint by remodeling up to 30 existing locations as part of an ongoing remodel program.

The company is also focusing on menu innovation to drive growth. It is concentrating on strategic differentiation and simplification within its menu, ensuring that standout offerings such as pizza, the world-famous Pizookie and award-winning craft beverages remain central to its identity. Additionally, wings, steaks and slow-roasted dishes have been identified as potential growth areas, with efforts underway to enhance customer satisfaction and consistency in these categories.

BJ’s Restaurants is benefiting from expansion efforts. It maintains a balanced approach to opening restaurants while ensuring that the portfolio is optimized for maximum shareholder returns.

Beyond immediate expansion, BJRI has been conducting a thorough analysis of recent restaurant openings to identify key success factors and optimize return on investment. Early findings have been encouraging, reinforcing the decision to resume building a pipeline for new restaurant locations. Plans for additional openings are set for 2026, with capital expenditure in 2025 contingent on the development of a more refined and strategically targeted site selection process.

BJRI’s Upward Estimate Revisions Signal Strength

Analysts are growing increasingly optimistic about the company’s earnings potential. Over the past 30 days, the Zacks Consensus Estimate for BJRI’s 2025 EPS has risen from $1.64 to $1.67, reflecting a positive shift in sentiment.

The company is poised for robust earnings growth, with projections indicating a 13.6% jump in 2025, followed by a 21.8% increase in 2026. Conversely, industry players like Shake Shack, Dutch Bros and First Watch Restaurant’s earnings for 2025 are likely to witness growth of 40.2%, 26.5% and 33.3%, year over year, respectively.

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End Note

BJ's Restaurants presents an appealing opportunity for investors despite recent stock weakness, thanks to its compelling valuation, solid fundamentals and strategic growth initiatives. BJRI's focus on remodeling, menu innovation, and operational enhancements to elevate the guest experience and improve efficiency bodes well.  Additionally, growing analyst confidence and upward earnings revisions signal strengthening momentum. BJRI sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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BJ's Restaurants, Inc. (BJRI) : Free Stock Analysis Report

Shake Shack, Inc. (SHAK) : Free Stock Analysis Report

Dutch Bros Inc. (BROS) : Free Stock Analysis Report

First Watch Restaurant Group, Inc. (FWRG) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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