Del Taco Restaurants Serves Up Combo Platter of Reasons to Buy In The company just turned a fantastic quarter, proving to be an appetizing play in the fast-casual dining market.

It's time for a celebratory lunch if you're a Del Taco Restaurants (NASDAQ:TACO) investor, because the company just turned in one fantastic quarter. With beats all around, the company proved it was an appetizing play in the fast-casual dining market; though 2020 wasn't always so great for the company, the fourth quarter proved it could snap back and produce some exciting outcomes.

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The savory smell of beats

It was a downright exciting slate of wins for Del Taco, as the company brought in some terrific numbers. The company brought in earnings per share of $0.20, which was ahead of not only the latest consensus estimate from Zacks of $0.14 per share, but also ahead of this time last year when the company brought in $0.18 per share.

Revenue also turned in a win, though a narrower win than the earnings beat. Del Taco's quarterly revenue reached $156.72 million for revenue in the quarter, which was above the estimated figure by a narrow 0.4%. However, it failed to top the figures from a year ago, which came in at $157.1 million.

Full-year figures also saw a bit of a slip, with total revenue down 4% against last year's figures. It's worth noting that, for the fourth quarter, comparable sales were up 3.8%, which brought total revenue to the narrow miss that we saw.

The company noted that its Crispy Chicken menu, along with its seasonal tamale sales, did excellent things for the bottom line. However, it, like pretty much every other restaurant out there, had some serious problems caused by COVID-19 and government reactions therein. With those restrictions starting to abate—more so in some places than in others—the company looks for further recovery thanks to improvements made in the face of COVID-19 driving better results without the handicap getting involved.

Still a tasty buy with analysts

Del Taco doesn't get a lot of movement in the analyst sector, our latest research made clear, but the movement it gets is generally positive. The company has been considered a consensus "buy" for the last six months.

Six months ago, the company had one "hold" rating and four "buy". That remained the case three months ago. A month ago, we saw the first major adjustment as one of the "buy" ratings departed, bringing the consensus to one "hold " and three "buy". That's where we remain today.

The price target, however, has undergone some unexpected shifts. Six months ago, it was $9.50. Three months ago, that jumped to $11.60. A month ago, that fell to $11 even, where it remains today.

There hasn't been a lot of movement from analysts, though, as the last major shift came back in early October of 2020, when Wedbush bumped up its price target from $11 per share to $13 per share. Given that the company currently sells at $11.35 a share as of this writing, however, many analysts are leaving some room to grow.

A stock to sink your teeth into

While the company hasn't issued guidance figures in either earnings or revenue, there's still a lot to like about Del Taco Restaurants. We've already seen the company fight back hard against COVID-19, bringing out new menu items and working to improve experiences for customers. We've also seen how the companies 2020 was only slightly off from its 2019, which is actually a huge feather in its cap given what 2020 looked like as a whole.

If Del Taco can keep this kind of momentum going into 2021, when a lot of places are starting to see restrictions falter if not fade away altogether, there's a good chance the company can bounce back harder than ever and deliver even better results. Sure, it's going to have a lot of competition—places like Chipotle Mexican Grill (NYSE: CMG) and others will be targeting that same market—but there are some advantages Del Taco can use. A map of Del Taco franchisees shows several states—including most of New England and a band of states in the midwest—considered "not available for development." Perhaps these areas have already reached critical mass, or perhaps there's an opportunity being missed to stage further expansion and get some more revenue streams firing up.

Still, with what we know so far, Del Taco has a lot of room for growth, and it's actively working to put those possibilities to work. That makes Del Taco a tasty option for investors looking to get in on fast-casual without the high prices of other, more established operations.