Core Viewpoint - Chipotle Mexican Grill is experiencing a decline in stock performance despite long-term growth, with recent financial results disappointing investors due to lower-than-expected revenue and declining same-store sales [2][3][5]. Financial Performance - In Q2, Chipotle reported revenue of $3.1 billion, which was below market expectations, leading to a stock price drop of over 14% [2]. - The company's adjusted earnings per share met Wall Street estimates, but overall performance has raised concerns among investors [2]. - Same-store sales growth was 7.9% in 2023 and 7.4% in 2024, but there was a decline of 0.4% in Q1 and 4% in Q2 of this year [6]. Consumer Behavior and Market Conditions - Foot traffic decreased by 4.9% in Q2, following a 2.3% drop in Q1, contributing to investor pessimism [7]. - CEO Scott Boatwright indicated that weak consumer sentiment, particularly among low-income consumers seeking value, is a significant challenge for the business [8]. Operational Strengths - Despite recent struggles, Chipotle maintains a strong operating margin of 27.4% in Q2, highlighting its efficiency in restaurant operations [10]. - The company has opened 113 net new stores this year and plans to add 330 locations by the end of 2025, indicating ongoing expansion efforts [11]. - Chipotle aims to grow its total store count to 7,000 in the U.S. and Canada, which would significantly increase revenue and earnings [12]. Valuation and Investment Opportunity - Chipotle's stock, which previously saw a 368% increase over five years, is now trading at a price-to-earnings ratio of about 40, the lowest since July 2020 [13][14]. - While not necessarily a "once-in-a-generation" opportunity, the current valuation may present a buying opportunity for investors [14].

Group 1 - Chipotle Mexican Grill is expected to report fiscal Q2 results on July 23, 2025, with earnings projected at $0.33 per share and sales of $3.11 billion, indicating no growth in earnings and a 5% increase in sales year-over-year [1] - In Q1, Chipotle's revenue rose by 6% to $2.88 billion, while adjusted EPS increased by 7% to $0.29, but comparable sales fell by 0.4% due to a 2.3% decline in transactions [2] - The company anticipates low single-digit comparable sales growth for 2025, with traffic expected to improve in the latter half of the year [2] Group 2 - Chipotle has historically experienced a decline in stock price after earnings announcements 55% of the time, with an average one-day drop of 4.9% [1][6] - Over the past five years, there have been 20 earnings data points, with positive one-day returns observed approximately 45% of the time, increasing to 50% when considering the last three years [6] - The median of positive one-day returns is 7.2%, while the median of negative returns is -4.9% [6]

Core Viewpoint - Chipotle Mexican Grill's shares have increased by approximately 2.5% over the past month, underperforming the S&P 500, raising questions about the sustainability of this trend leading up to the next earnings report [1]. Group 1: Earnings Report and Estimates - Recent estimates for Chipotle have trended downward, with the consensus estimate decreasing by 8.73% over the past month [2]. - The stock has received a Zacks Rank of 4 (Sell), indicating expectations of below-average returns in the coming months [4]. Group 2: VGM Scores - Chipotle has a strong Growth Score of A, but it is significantly lagging in Momentum Score with an F, and also received an F for Value Score, placing it in the fifth quintile for this investment strategy [3]. - The overall aggregate VGM Score for Chipotle is C, which is relevant for investors not focused on a single strategy [3].

Core Viewpoint - Chipotle Mexican Grill has underperformed in 2023, with a 15% decline in stock value compared to a 1% gain in the S&P 500, facing challenges in comparable sales and operating margins [1][12] Financial Performance - Revenue increased by 6% to $2.88 billion in the first quarter, while adjusted EPS rose by 7% to $0.29 [1] - Comparable-restaurant sales fell by 0.4%, driven by a 2.3% decrease in transactions, despite a 1.9% increase in average check size [1] - Operating margins compressed by 130 basis points to 26.2%, affected by rising food and labor costs and larger portion sizes [1] - Chipotle's revenue has grown at an average rate of 14.4% over the last three years, significantly outperforming the S&P 500's 6.2% growth [4] - The company expects low single-digit comparable sales growth for the full year 2025, with traffic anticipated to improve in the second half [1] Profitability Metrics - Chipotle's operating income over the last four quarters was $2.0 billion, resulting in a moderate operating margin of 17.5% [5] - The operating cash flow (OCF) was $2.1 billion, reflecting an OCF margin of 18.6% [5] - Net income for the preceding four quarters was $1.5 billion, indicating a net income margin of 13.6% [5] Valuation Comparison - Chipotle's price-to-sales (P/S) ratio is 6.1, compared to 2.8 for the S&P 500, indicating a higher valuation [6] - The price-to-earnings (P/E) ratio stands at 44.7 versus the benchmark's 24.5, suggesting that the stock is expensive [6] Financial Stability - Chipotle's debt was $4.5 billion, with a market capitalization of $70 billion, resulting in a low debt-to-equity ratio of 6.6% [8] - Cash and cash equivalents amount to $1.4 billion, leading to a cash-to-assets ratio of 15.5% [8] Resilience During Downturns - CMG stock has shown slightly better performance than the S&P 500 during recent downturns, indicating some resilience [9] - Historical data shows significant stock declines during past crises, but recovery has been achieved in each case [10][11] Overall Assessment - Chipotle's performance metrics indicate strong growth and financial stability, but high valuation levels suggest limited upside potential in the near term [12][13]

Chipotle Mexican Grill stock price has crashed in the past few months, moving from a high of $66.6 in December to the current $48. It is hovering near its lowest level since January 29 last year. This article explains why the CMG share price is on the cusp of a bearish breakdown after forming a double-top pattern. Copy link to section The stock has formed a bearish pennant pattern, a popular continuation sign. Additionally, it has fallen below the 50-week and 200-week Exponential Moving Averages (EMAs), ind ...