Top 10 Restaurant Stocks to Buy Under $20

7. El Pollo Loco Holdings, Inc. (NASDAQ:LOCO)

Share Price: $9.55

Number of Hedge Fund Holders: 18

El Pollo Loco Holdings, Inc. (NASDAQ:LOCO) develops, franchises, and licenses quick-service restaurants under the name El Pollo Loco. It specializes in fire-grilling fresh chicken and offers various popular food options, such as Pollo Bowls, Pollo Fit entrees, and more.

In a report released on April 8, Jeremy Hamblin from Craig-Hallum maintained a Buy rating on El Pollo Loco Holdings, Inc. (NASDAQ:LOCO). Craig-Hallum analyst Jeremy Hamblin also initiated company coverage on March 11 and set a Buy rating with an $18 price target. The analyst said that the company’s new management team holds extensive QSR experience and is thus revitalizing the brand, driving record AUVs and around 200 bps of margin expansion in fiscal year 2024.

El Pollo Loco Holdings, Inc. (NASDAQ:LOCO) also holds a unique position in the fast-growing chicken sector, and menu innovation in 2025 is expected to be a key driver of growth for the company, according to the firm. The firm sees further rest-level margin expansion to 18% based on food cost and labor initiatives. The lapping of the FAST Act in California will limit future wage pressure. The firm also cited the underpenetrated digital channel as a significant opportunity to drive margin and sales. The company ranks seventh on our list of the best restaurant stocks to invest in.