10Y annualized return is
excellent
at 15.1% per year
CMG has met or exceeded earnings expectations in
the majority of
recent quarters (8/10)
Strong Market Demand
High Return on Equity
Healthy Profit Margins
Adequate Liquidity Ratios
Strong Financial Performance
Operational Efficiency Improvements
Innovative Technology Integration
Aggressive Expansion Plans
Strong Marketing Strategy
High Valuation Ratios
Volatility in Earnings
High Debt Levels
Interest Coverage Issues
Margin Compression
Volatility in Comps
Pricing Sensitivity
Chipotle demonstrates strong business quality with exceptional financial performance and operational improvements, but faces challenges with margin compression and potential volatility in future comp sales. The company's ambitious expansion plans and innovative strategies position it well for future growth, despite some concerns about pricing sensitivity.
Analysis Date: February 4, 2025
Last Updated: March 11, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Chipotle Mexican Grill, Inc. is a restaurant company that makes and sells Mexican food, like burritos, tacos, and bowls. They have around 3,000 locations in several countries, including the United States and parts of Europe. Founded in 1993, Chipotle focuses on using fresh ingredients and allows customers to customize their meals. People enjoy their food for its flavor and the ability to choose what goes into their meal.
Streams of revenue
Geographic Distribution
Estimations for reference only
Core Products
Business Type
Business to Consumer
Competitive Advantages
Key Business Risks
Latest News
Chipotle is scheduled to report quarterly earnings on Wednesday after the market closes.
Fastest-Growing Authentic Mexican Franchise Brings Traditional Cuisine to Prosper, Texas CHICAGO, April 22, 2025 /PRNewswire/ -- After 12 years of sat...
Chipotle's stock has declined around 20% over the past year, driven by decelerating same-store sales growth and increasing competition from companies ...
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$43.39
Current Market Price: $47.08
IV/P Ratio: 0.92x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-9.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for CMG
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (41.96)
P/B ratio ≤ 1.5 (17.61)
Current ratio ≥ 2.0 (1.52x)
Long-term debt < Net current assets (6.97x)
Margin of safety (-9.0%)
CMG does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
43.16%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
26.67%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
13.56%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
The company has an impressive Return on Equity (ROE) of 42.78%, demonstrating its ability to generate substantial profits from shareholders' equity.
With a net profit margin of 13.56% and an operating profit margin of 16.94%, the company maintains solid profitability across its operations.
Despite strong margins, the company's high P/E ratio indicates that it may be trading at a premium due to expected future earnings, which introduces risk if actual results deviate negatively.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
1.24x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.52x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
The current ratio of 1.52 and quick ratio of 1.48 indicate that the company has sufficient short-term assets to cover its liabilities, suggesting good liquidity.
With a debt-to-equity ratio of 1.24 and a debt-to-assets ratio of 49.33%, the company carries a significant amount of debt, which may pose risks in adverse market conditions.
An interest coverage ratio of 0.0 raises concerns about the company's ability to meet interest obligations, indicating potential liquidity challenges.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Chipotle achieved significant financial success in 2024, with a 15% sales growth reaching $11.3 billion, driven by a 7.4% same-store sales growth and over 5% transaction growth.
The company is focused on enhancing throughput and operational efficiency, achieving notable improvements in peak period performance and general manager retention, which contributes to better restaurant stability.
Chipotle is implementing new equipment and technology to streamline operations, such as produce slicers and dual-sided planchas, which enhance food preparation efficiency and worker experience.
Despite the overall growth, there was a decline in restaurant-level margin to 24.8%, indicating challenges with cost management and inflationary pressures.
Chipotle plans to open 315 to 345 new restaurants in 2025, focusing on drive-through Chipotle lanes that have shown better revenues and margins.
The marketing strategy for 2025 is robust, leveraging partnerships and limited-time offers to sustain customer engagement and drive transactions.
The company anticipates challenges with comp sales in early 2025 due to difficult year-over-year comparisons and external factors like weather and calendar shifts.
The cautious approach to price increases suggests that consumer price sensitivity may be rising, which could impact future revenues.