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Chipotle (CMG)
NYSE:CMG
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Chipotle
(NYSE:CMG)77Outperform
Positive Factors
Automation and Cost Management
CMG will likely be a leader in deploying automation at substantial scale, in a way that restrains costs, drives margins and throughput, and allows the company to be judicious with pricing, where it already has an edge.
Financial Position and Investment
CMG's enviable balance sheet ($750M cash, no debt, $1.5B of FCF just last year) gives it optionality with regards to existing store investment, tech spend, new development, or return of capital.
Negative Factors
Sales Data and Market Pressure
Headwinds have weighed on the stock lately, including the sell-off in growth/momentum names across the sector and weaker real-time sales data.
Chipotle (CMG) vs. S&P 500 (SPY)
Market Cap
$72.06B
Dividend YieldN/A
Average Volume (3M)12.41M
Price to Earnings (P/E)47.7
Beta (1Y)0.76
Revenue Growth14.61%
EPS Growth25.68%
CountryUS
Employees130,504
SectorConsumer Cyclical
Sector Strength53
IndustryRestaurants & Bars
Share Statistics
EPS (TTM)1.11
Shares Outstanding1,355,337,000
10 Day Avg. Volume13,738,913
30 Day Avg. Volume12,408,246
Financial Highlights & Ratios
PEG Ratio1.86
Price to Book (P/B)N/A
Price to Sales (P/S)6.51
Price to Cash Flow (P/CF)35.00
P/FCF Ratio35.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$67.38Price Target Upside26.73% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering25
Chipotle Business Overview & Revenue Model
Company DescriptionChipotle Mexican Grill, Inc. is a Mexican food restaurant chain operator. It engages in the development and operation of fast-casual, fresh Mexican food restaurants throughout the United States. It offers a focused menu of burritos, burrito bowls, tacos, and salads cooked through traditional methods and served in a unique atmosphere.
How the Company Makes MoneyChipotle generates revenue primarily through the sale of its Mexican-inspired cuisine at its restaurants. The company's key revenue streams include in-store dining, takeout, and digital sales through its website and mobile app, which have become increasingly significant in recent years. Chipotle's revenue model is bolstered by its efficient operations, high customer turnover, and strategic locations. The company has also developed ancillary revenue channels through catering services and branded merchandise. While Chipotle does not rely heavily on franchising, its growth strategy focuses on expanding its number of company-owned stores and enhancing customer experience through technological innovations and loyalty programs.
Chipotle Financial Statement Overview
Summary
Chipotle exhibits solid financial performance with strong revenue and profit growth, improved profitability margins, and robust cash flow generation. The company has effectively managed costs and capital expenditures, although increased debt levels indicate higher leverage.Income Statement
Chipotle has demonstrated consistent revenue growth with a notable increase from $5.99 billion in 2020 to $11.31 billion in 2024, reflecting a strong expansion trajectory. The company's gross profit margin has improved, indicating efficient cost management, with gross profit growing from $1.04 billion to $7.96 billion over the same period. Net profit margin has consistently improved, reaching 13.55% in 2024, highlighting robust profitability. EBIT and EBITDA margins have also shown positive trends, supporting strong operational performance.85
Very Positive
Balance Sheet
The balance sheet shows a healthy increase in stockholders' equity from $2.02 billion in 2020 to $3.66 billion in 2024, suggesting a strong equity base. The debt-to-equity ratio remains moderate, though total debt has risen, indicating increased leverage but manageable risk. Return on equity has shown improvement, reflecting effective use of equity capital. The equity ratio has improved, indicating better asset financing through equity.78
Positive
Cash Flow
Chipotle's cash flow position is strong, with operating cash flow increasing from $663.85 million in 2020 to $2.11 billion in 2024. The free cash flow growth rate is positive, reflecting efficient capital expenditure management. Operating cash flow to net income ratio remains favorable, highlighting strong cash generation relative to net income. The company has maintained a positive free cash flow to net income ratio, underscoring effective cash flow management.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 11.31B | 9.87B | 8.63B | 7.55B | 5.98B | Gross Profit |
| 3.02B | 2.59B | 2.06B | 1.71B | 1.04B | EBIT |
| 1.92B | 1.56B | 1.16B | 804.94M | 290.16M | EBITDA |
| 2.32B | 1.95B | 1.47B | 1.07B | 574.79M | Net Income Common Stockholders |
| 1.53B | 1.23B | 899.10M | 652.98M | 355.77M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.42B | 1.30B | 899.14M | 1.08B | 951.60M | Total Assets |
| 9.20B | 8.04B | 6.93B | 6.65B | 5.98B | Total Debt |
| 4.54B | 4.05B | 3.73B | 3.52B | 3.16B | Net Debt |
| 3.79B | 3.49B | 3.35B | 2.70B | 2.55B | Total Liabilities |
| 5.55B | 4.98B | 4.56B | 4.36B | 3.96B | Stockholders Equity |
| 3.66B | 3.06B | 2.37B | 2.30B | 2.02B |
| Cash Flow | Free Cash Flow | |||
| 1.51B | 1.22B | 844.01M | 839.61M | 290.50M | Operating Cash Flow |
| 2.11B | 1.78B | 1.32B | 1.28B | 663.85M | Investing Cash Flow |
| -837.53M | -946.01M | -830.03M | -522.04M | -432.72M | Financing Cash Flow |
| -1.07B | -660.65M | -929.40M | -548.61M | -104.85M |
Chipotle Technical Analysis
Negative
53.17
Price Trends
57.33
Negative
58.87
Negative
58.44
Negative
Market Momentum
-1.33
Negative
40.87
Neutral
60.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMG, the sentiment is Negative. The current price of 53.17 is below the 20-day moving average (MA) of 55.09, below the 50-day MA of 57.33, and below the 200-day MA of 58.44, indicating a bearish trend. The MACD of -1.33 indicates Negative momentum. The RSI at 40.87 is Neutral, neither overbought nor oversold. The STOCH value of 60.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CMG.
Chipotle Risk Analysis
Chipotle disclosed 25 risk factors in its most recent earnings report. Chipotle reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Chipotle Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $72.06B | 47.72 | 41.97% | ― | 14.61% | 25.68% | |
77 Outperform | $23.48B | 22.99 | 50.38% | 2.81% | 5.14% | 5.30% | |
76 Outperform | $218.46B | 26.84 | -216.57% | 2.23% | 1.67% | -1.61% | |
75 Outperform | $43.64B | 29.99 | -19.43% | 1.74% | 6.68% | -7.09% | |
68 Neutral | $4.62B | 436.80 | 2.17% | ― | 15.18% | -48.78% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
CMG
Chipotle
53.17
-1.06
-1.95%
DRI
Darden Restaurants
192.72
24.29
14.42%
MCD
McDonald's
305.77
20.18
7.07%
YUM
Yum! Brands
158.41
22.38
16.45%
QSR
Restaurant Brands International
65.39
-11.19
-14.61%
SHAK
Shake Shack
100.31
0.12
0.12%
Chipotle Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -9.91% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
Chipotle reported strong sales growth and record restaurant openings, alongside innovations in equipment aimed at operational efficiency. However, challenges such as a slight margin decline and external factors like weather impacts and commodity costs were noted. Overall, the call reflects a positive sentiment with a focus on growth and innovation.Highlights
Strong Sales Growth
For the fiscal year 2024, sales grew about 15% to reach $11.3 billion, driven by a 7.4% comp, including over 5% transaction growth. Digital sales of $3.9 billion represented 35% of sales.
Record Restaurant Openings
Chipotle opened a record 304 new restaurants in 2024, including 257 Chipotle lanes. This is the second year in a row of record openings.
Innovative Equipment Rollout
Chipotle is rolling out several pieces of innovative equipment in new restaurant openings, including produce slicers, dual-sided planchas, and dual-vat fryers, aimed at improving efficiency and product consistency.
Positive Transaction Growth
Transactions grew by 4% in the fourth quarter, driven by improved throughput and the successful rollout of Brisket as a limited-time offer.
Employee Growth and Development
Over 23,000 employees were promoted in 2024, with over 85% of restaurant management roles filled internally, highlighting strong leadership development within the company.
Lowlights
Margin Decline
The restaurant-level margin was 24.8% in the fourth quarter, a decline of 60 basis points year-over-year, due to higher costs and the impact of promotions.
Weather and Calendar Impacts
Comps were negatively impacted by weather and calendar shifts in the first quarter of 2025, with a 400 basis point impact on January comps.
Avocado and Commodity Costs
Higher costs of avocados and other commodities impacted cost of sales, which increased by about 70 basis points in Q4.
Company Guidance
During the Chipotle Mexican Grill Fourth Quarter 2024 Results Conference Call, the company provided guidance highlighting key metrics and strategic initiatives. For fiscal year 2024, Chipotle reported a sales growth of approximately 15%, reaching $11.3 billion, driven by a 7.4% increase in comparable store sales, including over 5% transaction growth. Digital sales accounted for $3.9 billion or 35% of total sales. Average unit volumes (AUVs) increased to $3.2 million, and the restaurant-level margin improved by 50 basis points to 26.7%. Adjusted diluted earnings per share (EPS) rose by 24% to $1.12. The company opened a record 304 new restaurants, including 257 with Chipotle lanes. Looking ahead to 2025, Chipotle anticipates annual comparable sales growth in the low- to mid-single-digit range, supported by continued improvements in throughput, a strong marketing plan, and innovative technological advancements. The company also plans to accelerate new restaurant openings, with 315 to 345 expected in 2025, and expand its international footprint, particularly in Canada and the Middle East.Chipotle Corporate Events
Executive/Board Changes
Chipotle Approves 2025 CEO Compensation Package
Neutral
Dec 20, 2024
Chipotle’s Board of Directors has approved the 2025 compensation package for Scott Boatwright, who was recently promoted to Chief Executive Officer from Interim CEO. The new compensation package includes an increased base salary, a higher target for annual cash incentives, and substantial annual equity awards, reflecting the company’s commitment to rewarding leadership and ensuring alignment with shareholder interests.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.