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CMG

Chipotle Mexican Grill NYSE:CMG Stock Report

Last Price

US$1.63k

Market Cap

US$45.3b

7D

3.0%

1Y

-13.1%

Updated

11 Aug, 2022

Data

Company Financials +
CMG fundamental analysis
Snowflake Score
Valuation1/6
Future Growth5/6
Past Performance4/6
Financial Health5/6
Dividends0/6

CMG Stock Overview

Chipotle Mexican Grill, Inc., together with its subsidiaries, owns and operates Chipotle Mexican Grill restaurants.

Chipotle Mexican Grill Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Chipotle Mexican Grill
Historical stock prices
Current Share PriceUS$1,631.09
52 Week HighUS$1,958.55
52 Week LowUS$1,196.28
Beta1.32
1 Month Change29.30%
3 Month Change23.73%
1 Year Change-13.12%
3 Year Change101.40%
5 Year Change413.05%
Change since IPO3,607.02%

Recent News & Updates

Aug 10

Chipotle Mexican Grill: Solid Second Quarter Results Further Establish Long-Term Outperformance Thesis

F2Q2022 revenues of ~$2.21 billion missed analyst projections by ~$40 million. EPS of $9.25 beat consensus estimates by $0.21. Digital transactions remained steady despite significant surge in dine-in customers. We’re maintaining our 1-year Price Target of $2,020/share. Reiterate Buy Rating. Investment Conclusion Chipotle Mexican Grill (CMG) delivered outstanding F2Q2022 financial results. The outperformance was driven by double digit growth in system sales and same-store sales derived from substantial expansion in dine-in transactions and sustained off-premise orders. Accordingly, supported by a decrease in delivery transactions (which generate relatively low margins), and revenue leverage from the sharply higher retail sales, as fixed cost/dollar of sales declined, restaurant level margins advanced considerably, inching closer to peak levels, experienced prior to the food contamination incidences that plagued the company during CY2015. That margins expanded despite cost inflation related to commodities and hourly wages, was encouraging. Moreover, annual average unit volumes reached $2.8 million (best stores are generating between $6 million and $7 million), extending significantly towards the $3 million target. CMG added 42 new stores (of which 32 feature Chipotlanes) to its restaurant footprint ending the quarter with 3,052 outlets. Over the next couple of quarters, we expect the strong momentum in sales to continue, fueled by the persistent uptrend in dine-in sales, sustained digital sales, and the launch of a new menu item, the garlic guajillo steak. In addition, we don't view a potential economic downturn as a gating factor for sales (although the frequency of visits associated with the lower-income group is clearly declining), as CMG's customers belong to the higher income bracket, for the most part. Further, despite some decrease in sales related to college towns as kids return home for the Summer, overall, we expect seasonality to support sales, during the third quarter. Moreover, we anticipate sequential improvement in margins at the restaurant level, driven by some easing in commodity cost inflation, stabilizing federal wage growth, improved labor productivity due to the deployment of a digital scheduling tool, a planned price increase, and the impact of operating initiatives being rolled-out. Similarly, we expect leverage at the company level, due to decrease in SG&A spending, and economies of scale related to lower marginal costs associated with corporate infrastructure, marketing, and technology. Therefore, buoyed by solid upside in revenues and margins, earnings and free cash flows are likely to surge considerably, during FY2022, in our opinion. For the year, CMG plans on launching between 235 and 250 new restaurants, of which ~80% are expected to include a Chipotlane. In addition, the firm has guided to F3Q2022 same-store sales in a range of mid-to-high single digits. During July, CMG's same-store sales were trending at around mid-single digits. Longer-term, CMG's planned growth in footprint to 7,000 restaurants within ~10 years, from the current ~3,000 will drive the majority of its growth. Given that the massive expansion in the number of restaurants is likely to be focused on under penetrated regions, we do not expect cannibalization in sales or declines in average unit volumes, as new units are established. Additional growth will be derived from an increase in same-store sales attributed to: Chipotlanes, menu innovation, the loyalty program, some conversion of dine-in orders to digital, and the continued growth of off-premise sales. Given the potential significant expansion in sales, margins are likely to increase as marginal fixed costs decrease substantially and economies of scale related to corporate spending, advertising, and the digital platform are secured. As a flow-through of higher sales and improved margins, we expect substantial growth in earnings and free cash flows over an elongated time horizon. Considering that F2Q2022 financial results have further established our strong long-term view on CMG, we are confident that the firm will handily meet and exceed our normalized 10-year revenue growth rate of 17%, which incorporates a 10-year store count of 7,000 and average unit volumes of over $3 million. Therefore, we are maintaining our 1-year Price Target of $2,020/share for CMG. Reiterate Buy Rating. (Please go through our initiation report "Chipotle Mexican Grill: Turnaround Story With Substantial Growth Potential" and related notes for our long term opinion on the stock). Key Takeaways From The Second Quarter F2Q2022 Results Summary. For the quarter, CMG reported revenues of ~$2.21 billion (+17% compared to F2Q2021) missing analyst expectations of ~$2.25 billion, and earnings per share of $9.25 (+40.2% on a year over year basis) was above consensus estimates of $9.04. Excluding extraordinary items, earnings per share would have been $9.30, representing an increase of 24.7% from F2Q2021. In addition, compared to the same quarter last year, same-store sales increased by 10.1% over the second quarter. Net income for the period was ~$260 million reflecting an expansion of 38.2% on a year-over-year basis. Restaurant margins of 25.2% increased by 70 bps compared to the prior year's same quarter. Labor Management Tool Represents Key Growth Driver. CMG's is currently rolling-out technology which is designed to optimally schedule employees based on labor requirements on the front make-line as well as the digital make-line. In addition, strategies are being implemented to orient the newer staff, particularly that hired on during and after the pandemic, including front-line workers and General Managers, on the mechanics of the firm's peak throughput that was achieved during 2013 and 2014. Based on management commentary, a five entrée increase every 15 minutes during regular hours, could potentially translate to 1% of same-store sales growth for that day. Considering that the current throughput is 25 entrees/every 15 minutes compared to the peak throughput of between 30 to 33 entrées/every 15 minutes evidenced during the 2013/2014 time frame, there appears significant opportunity for same-store sales growth, as the initiatives being rolled out to ignite throughput begin to gain traction. International Opportunity Gathering Momentum. CMG's business outside the U.S, continued to shine with Canadian restaurants generating annual average unit volumes consistent with those associated with domestic restaurants. In addition, same-store sales continued to advance substantially in the region. Given the recent addition of the loyalty program to the Canadian business, we expect sales momentum to continue, as transactions associated with rewards platforms are considered as digital sales, which are associated with superior margins and incremental sales, as customers that transact online, order more frequently and with higher check values. Beyond North America, CMG's business in Europe continues to develop, with improving unit economics, the roll-out of digital platforms, and opening of smaller footprint store formats. In addition, additional territories in the region are being tested under CMG's stage-gate process. In that regard, supported by the launch of five new restaurants over the past 18 months and the roll-out of the digital ecosystem, CMG's U.K. business has been outperforming, as per management. In addition, the digital platform associated with the company's French business is expected to be introduced shortly. Plant Protein As Center-Of-Plate Item On Cards. CMG typically introduces two to three new menu items every year, comprised mainly of limited time offerings. During FY2022, the firm has launched Pollo Asado and Chorizo, and a new menu item, the garlic guajillo steak is nearing debut, having already passed the stage-gate process. Given the increasing attention that plant-based foods are gathering, CMG is actively expending efforts to identify a substantive plant based menu item that would be consistent with the company's food with integrity ethos and also delicious from a culinary standpoint. To support the objective, CMG has invested in an early stage plant food company called Meati, that is focused on developing mushroom based meat alternatives. Recall that CMG has actively supported the plant food trend, launching the tofu based Sofrita in 2014, which remains on the menu as a permanent item, and introducing the pea based Chorizo as a limited time offer, earlier this year.

Aug 01
Chipotle Mexican Grill (NYSE:CMG) Has More To Do To Multiply In Value Going Forward

Chipotle Mexican Grill (NYSE:CMG) Has More To Do To Multiply In Value Going Forward

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Typically, we'll want...

Shareholder Returns

CMGUS HospitalityUS Market
7D3.0%2.8%1.3%
1Y-13.1%-17.2%-11.7%

Return vs Industry: CMG exceeded the US Hospitality industry which returned -17.9% over the past year.

Return vs Market: CMG underperformed the US Market which returned -11.6% over the past year.

Price Volatility

Is CMG's price volatile compared to industry and market?
CMG volatility
CMG Average Weekly Movement6.6%
Hospitality Industry Average Movement8.7%
Market Average Movement7.8%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: CMG is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: CMG's weekly volatility (7%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
199397,660Brian Niccolhttps://www.chipotle.com

Chipotle Mexican Grill, Inc., together with its subsidiaries, owns and operates Chipotle Mexican Grill restaurants. As of February 15, 2022, it owned and operated approximately 3,000 restaurants in the United States, Canada, the United Kingdom, France, Germany, and rest of Europe. The company was founded in 1993 and is headquartered in Newport Beach, California.

Chipotle Mexican Grill Fundamentals Summary

How do Chipotle Mexican Grill's earnings and revenue compare to its market cap?
CMG fundamental statistics
Market CapUS$45.29b
Earnings (TTM)US$756.15m
Revenue (TTM)US$8.15b

59.9x

P/E Ratio

5.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
CMG income statement (TTM)
RevenueUS$8.15b
Cost of RevenueUS$5.05b
Gross ProfitUS$3.10b
Other ExpensesUS$2.34b
EarningsUS$756.15m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)27.23
Gross Margin38.00%
Net Profit Margin9.28%
Debt/Equity Ratio0%

How did CMG perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is CMG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CMG?

Other financial metrics that can be useful for relative valuation.

CMG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue5.9x
Enterprise Value/EBITDA40.9x
PEG Ratio2.7x

Price to Earnings Ratio vs Peers

How does CMG's PE Ratio compare to its peers?

CMG PE Ratio vs Peers
The above table shows the PE ratio for CMG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average23.9x
YUM Yum! Brands
22.6x7.4%US$33.5b
QSR Restaurant Brands International
22.5x4.9%US$27.0b
SBUX Starbucks
24x14.8%US$100.1b
YUMC Yum China Holdings
26.6x27.4%US$20.3b
CMG Chipotle Mexican Grill
59.9x22.1%US$45.3b

Price-To-Earnings vs Peers: CMG is expensive based on its Price-To-Earnings Ratio (59.9x) compared to the peer average (23.9x).


Price to Earnings Ratio vs Industry

How does CMG's PE Ratio compare vs other companies in the US Hospitality Industry?

Price-To-Earnings vs Industry: CMG is expensive based on its Price-To-Earnings Ratio (59.9x) compared to the US Hospitality industry average (17.7x)


Price to Earnings Ratio vs Fair Ratio

What is CMG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CMG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio59.9x
Fair PE Ratio46.9x

Price-To-Earnings vs Fair Ratio: CMG is expensive based on its Price-To-Earnings Ratio (59.9x) compared to the estimated Fair Price-To-Earnings Ratio (46.9x).


Share Price vs Fair Value

What is the Fair Price of CMG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CMG ($1631.09) is trading below our estimate of fair value ($1648.03)

Significantly Below Fair Value: CMG is trading below fair value, but not by a significant amount.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Chipotle Mexican Grill forecast to perform in the next 1 to 3 years based on estimates from 28 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


22.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CMG's forecast earnings growth (22.1% per year) is above the savings rate (1.9%).

Earnings vs Market: CMG's earnings (22.1% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: CMG's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CMG's revenue (12.3% per year) is forecast to grow faster than the US market (8% per year).

High Growth Revenue: CMG's revenue (12.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CMG's Return on Equity is forecast to be very high in 3 years time (50.9%).


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Past Performance

How has Chipotle Mexican Grill performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


34.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CMG has high quality earnings.

Growing Profit Margin: CMG's current net profit margins (9.3%) are higher than last year (8.6%).


Past Earnings Growth Analysis

Earnings Trend: CMG's earnings have grown significantly by 34.3% per year over the past 5 years.

Accelerating Growth: CMG's earnings growth over the past year (29%) is below its 5-year average (34.3% per year).

Earnings vs Industry: CMG earnings growth over the past year (29%) underperformed the Hospitality industry 52.4%.


Return on Equity

High ROE: CMG's Return on Equity (35.1%) is considered high.


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Financial Health

How is Chipotle Mexican Grill's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: CMG's short term assets ($1.0B) exceed its short term liabilities ($831.6M).

Long Term Liabilities: CMG's short term assets ($1.0B) do not cover its long term liabilities ($3.6B).


Debt to Equity History and Analysis

Debt Level: CMG is debt free.

Reducing Debt: CMG has not had any debt for past 5 years.

Debt Coverage: CMG has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: CMG has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


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Dividend

What is Chipotle Mexican Grill current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


0.08%

Forecast Dividend Yield

Dividend Yield vs Market

Notable Dividend: Unable to evaluate CMG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate CMG's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CMG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CMG's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as CMG has not reported any payouts.


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Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average management tenure


CEO

Brian Niccol (48 yo)

4.42yrs

Tenure

US$17,880,580

Compensation

Mr. Brian R. Niccol serves as Independent Director at KB Home since July 8, 2021. He has been Chief Executive Officer and Director at Chipotle Mexican Grill, Inc., since March 05, 2018 and has been its Cha...


CEO Compensation Analysis

Compensation vs Market: Brian's total compensation ($USD17.88M) is above average for companies of similar size in the US market ($USD12.88M).

Compensation vs Earnings: Brian's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: CMG's management team is considered experienced (4.8 years average tenure).


Board Members

Experienced Board: CMG's board of directors are considered experienced (3.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CMG insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Chipotle Mexican Grill, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Chipotle Mexican Grill, Inc.
  • Ticker: CMG
  • Exchange: NYSE
  • Founded: 1993
  • Industry: Restaurants
  • Sector: Consumer Services
  • Implied Market Cap: US$45.287b
  • Shares outstanding: 27.76m
  • Website: https://www.chipotle.com

Number of Employees


Location

  • Chipotle Mexican Grill, Inc.
  • 610 Newport Center Drive
  • Suite 1400
  • Newport Beach
  • California
  • 92660
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/11 00:00
End of Day Share Price2022/08/11 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.