Latest news with #ChipotleMexicanGrill
Yahoo
3 days ago
- Business
- Yahoo
Best Stock to Buy Right Now: Apple vs. Chipotle
Chipotle has had more consistent annual growth rates than Apple. Meanwhile, Apple is currently right in the crosshairs of more tariffs. The clearer path for future growth at Chipotle makes it more appealing. 10 stocks we like better than Chipotle Mexican Grill › It might seem like a strange comparison to pit Apple (NASDAQ: AAPL) and Chipotle Mexican Grill (NYSE: CMG) against each other, but these are two companies that are very popular among investors. While both face certain headwinds from things like tariffs and a bit of consumer uncertainty, I'm going to throw a real zinger out there, and call Chipotle the better investment at this time. Here's why. First and foremost, let's look at how these two stocks have been doing. Over the last five years, Chipotle has been a much more consistent performer in terms of top-line revenue growth, expanding by 14.5% annually over the last few years. In comparison, Apple's momentum has slid since 2021, with revenue growth in the low single digits, and even negative 2.8% in 2023. Looking to 2025, both companies started out fairly strongly. Chipotle had year-over-year revenue growth of 6.4% in the first quarter, with a 7.7% increase in earnings per share to $0.28 per diluted share. Apple, in comparison, posted a 5% increase in revenue in its second fiscal quarter, while earnings were up a strong 8% to $1.65. On a trailing basis, Chipotle is a bit more expensive than Apple, carrying a P/E ratio of 44.8 vs. Apple's price-to-earnings ratio of 31.2, but I believe my next point will explain why Chipotle is still the better buy. Apple is a mature tech giant. Its iPhone, iPad, and Mac product lines have already penetrated global markets extensively. Growth now hinges on incremental innovations, services, and accessories -- areas that, while profitable, are already highly saturated and competitive. Take, for example, how many streaming services there are today as opposed to even a few years ago. Initiatives like Apple TV+ have a lot of competition now. Based on the sheer size of the company, it's going to be harder to hit high growth rates. Chipotle, by contrast, is still in a robust growth phase. With fewer than 4,000 stores and plans to expand in North America rapidly, Chipotle isn't resting on its laurels. It also recently announced its intentions to begin opening stores in Mexico by early 2026. It has significant room for physical footprint growth with the addition of international markets, giving it an untapped global potential. Let's face it. Tariffs are on everyone's mind right now. With President Donald Trump recently threatening Apple with a 25% tariff if they don't move their business back to the U.S., this is a nervous moment to hold a lot of Apple stock. When you consider how incredibly important the iPhone is to Apple's bottom line, this really matters. Chipotle, on the other hand, is arguably a little bit more insulated from all of the drama of global tech cycles, tech tariffs, semiconductor shortages, and international regulatory pressure. Sure, some of its food supply routes might experience some headaches, but we're not seeing food targeted the way big tech is. One worry is that the company did say earlier in the year that it would eat the costs of higher prices, rather than carrying them over to the consumer. That puts a damper on overall potential, but Chipotle still expects positive comp restaurant sales for the year. The way I view it is fairly straightforward. Food is always in demand. Expensive phone upgrades and laptops are not. That gives Chipotle an edge. Apple remains a technological powerhouse, but its days of rapid growth may be behind it. Chipotle, on the other hand, is still a nimble, scalable company with strong brand loyalty, accelerating growth, and untapped markets. Before you buy stock in Chipotle Mexican Grill, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Chipotle Mexican Grill wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 David Butler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Chipotle Mexican Grill. The Motley Fool recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy. Best Stock to Buy Right Now: Apple vs. Chipotle was originally published by The Motley Fool
Yahoo
5 days ago
- Business
- Yahoo
Chipotle Mexican Grill (CMG) Stock Drops Despite Market Gains: Important Facts to Note
Chipotle Mexican Grill (CMG) ended the recent trading session at $49.73, demonstrating a -0.68% swing from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily gain of 0.4%. At the same time, the Dow added 0.28%, and the tech-heavy Nasdaq gained 0.39%. Coming into today, shares of the Mexican food chain had lost 0.89% in the past month. In that same time, the Retail-Wholesale sector gained 5.7%, while the S&P 500 gained 6.69%. The investment community will be paying close attention to the earnings performance of Chipotle Mexican Grill in its upcoming release. The company's upcoming EPS is projected at $0.32, signifying a 5.88% drop compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $3.1 billion, indicating a 4.39% increase compared to the same quarter of the previous year. In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.21 per share and a revenue of $12.23 billion, indicating changes of +8.04% and +8.1%, respectively, from the former year. It is also important to note the recent changes to analyst estimates for Chipotle Mexican Grill. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability. Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system. Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 1.17% lower within the past month. Chipotle Mexican Grill is holding a Zacks Rank of #4 (Sell) right now. Looking at its valuation, Chipotle Mexican Grill is holding a Forward P/E ratio of 41.51. This denotes a premium relative to the industry's average Forward P/E of 23.33. Investors should also note that CMG has a PEG ratio of 2.48 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Retail - Restaurants industry stood at 2.56 at the close of the market yesterday. The Retail - Restaurants industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 171, this industry ranks in the bottom 31% of all industries, numbering over 250. The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. To follow CMG in the coming trading sessions, be sure to utilize Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
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Is Trending Stock Chipotle Mexican Grill, Inc. (CMG) a Buy Now?
Chipotle Mexican Grill (CMG) has recently been on list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future. Over the past month, shares of this Mexican food chain have returned +0.7%, compared to the Zacks S&P 500 composite's +7.4% change. During this period, the Zacks Retail - Restaurants industry, which Chipotle falls in, has gained 2.1%. The key question now is: What could be the stock's future direction? While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making. Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings. We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. For the current quarter, Chipotle is expected to post earnings of $0.32 per share, indicating a change of -5.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -2% over the last 30 days. The consensus earnings estimate of $1.21 for the current fiscal year indicates a year-over-year change of +8%. This estimate has changed -1.2% over the last 30 days. For the next fiscal year, the consensus earnings estimate of $1.42 indicates a change of +17.8% from what Chipotle is expected to report a year ago. Over the past month, the estimate has changed -0.7%. Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Chipotle is rated Zacks Rank #4 (Sell). The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial. For Chipotle, the consensus sales estimate for the current quarter of $3.1 billion indicates a year-over-year change of +4.4%. For the current and next fiscal years, $12.23 billion and $13.79 billion estimates indicate +8.1% and +12.7% changes, respectively. Chipotle reported revenues of $2.88 billion in the last reported quarter, representing a year-over-year change of +6.4%. EPS of $0.29 for the same period compares with $0.27 a year ago. Compared to the Zacks Consensus Estimate of $2.92 billion, the reported revenues represent a surprise of -1.49%. The EPS surprise was +3.57%. The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates just once over this period. No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance. While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price. As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued. Chipotle is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade. The facts discussed here and much other information on might help determine whether or not it's worthwhile paying attention to the market buzz about Chipotle. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
23-05-2025
- Business
- Yahoo
American-Made Growth: 4 Top Restaurant Stocks Fueling U.S. Expansion
Quick-service restaurant (QSR) expansion is a great American investment theme. While not without risks, expansion is one of the biggest growth drivers for quick-service restaurant operators. There are a number of QSR operators that still have a long runway of expansion ahead. 10 stocks we like better than Chipotle Mexican Grill › One of the great American growth themes throughout the years has been quick-service restaurant (QSR) expansion. Success stories are abundant, with companies like McDonald's and Starbucks growing to have more than 13,000 locations in the U.S. alone. Store growth is a powerful driver and has ultimately helped propel these stocks over the years. Now, not every restaurant expansion story is successful. Some restaurant operators struggle moving outside their region, like Jack in the Box. Others fail because they become too aggressive and try to expand too quickly, taking on debt, like Krispy Kreme. That said, restaurant stocks with a lot of expansion still ahead can be great investments. Let's look at four potential great options. Chipotle Mexican Grill (NYSE: CMG) has been a restaurant expansion story for more than 20 years, and it still has a solid runway ahead. At the end of the first quarter, it operated 3,781 company-owned restaurants. It plans to open between 315 to 345 new company-owned locations in 2025, which would represent 9% unit growth this year. Over the long term, the company has talked about operating up to 7,000 locations in North America. At its current pace, it would reach its goal in the next 12 to 13 years. That's a solid runway for one of the most successful restaurant operators of the last 20 years. Meanwhile, the company has already begun to plant the seeds for international expansion. It has a few locations in Europe and plans to enter Mexico next year through a partnership agreement with Alsea. Chipotle is also currently expanding in the Middle East through a partnership with Alshaya Group, opening three restaurants in Kuwait and two in Dubai. Cava (NYSE: CAVA) has been one of the hottest restaurants over the past year, with the fast casual chain reporting four straight quarters of positive double-digit, same-store sales. The company is seeing solid traffic gains despite increased prices, which is something a younger Chipotle saw in its early days. With only 382 locations at the end of last quarter ended April 20, Cava is just at the beginning of its expansion story. The company plans to open between 64 to 68 new locations this fiscal year, which would be high-teens unit growth. Its goal is to reach at least 1,000 restaurants by 2032, which would be nearly triple the number of locations it has today. The company has been using what it calls a "coastal smile" expansion strategy, beginning its initial expansion along the U.S. East Coast, down through the Sunbelt, and into California. With this, it has been able to take advantage of population trends and focus on areas most likely interested in Mediterranean cuisine. However, it has since begun to expand into the Midwest into cities like Chicago and Detroit. The company is using a sound, measured expansion strategy that should set it up for long-term success. Coffee shop operator Dutch Bros (NYSE: BROS) has the opportunity to be the next big regional-to-national expansion story. The Pacific Northwest company currently has 1,012 shops, of which 695 were company-owned, at the end of Q1 in only 18 states. While the company primarily operates in the western U.S., it also has 27 stores in Tennessee that appear to be performing well, showing its opportunity in other areas of the country. It is currently looking to open at least 160 new locations this year, which would be about 16% unit growth. It believes it can reach 2,029 locations by the end of 2029 and sees a total market opportunity for 7,000 shops. In addition, the company has been seeing solid same-store sales and has a real opportunity to grow its sales by adding more food items to its menu. Currently, only 2% of its sales come from food, while nearly 20% of Starbucks sales are food, so this is a big opportunity. The company's stores are relatively small with no indoor seating, so its cost to build new shops is relatively inexpensive. Meanwhile, with systemwide annual unit volumes (AUV) of around $2 million per store, it tends to see short payback periods for its new opening investments. There is nothing more American than a good burger, and Shake Shack (NYSE: SHAK) arguably makes some of the best. It also has a strong expansion story in front it. At the end of 2024, it operated 579 locations, of which 373 were in the U.S. However, more than 97% of its revenue came from the U.S., and it is looking to ramp up its U.S. expansion. It plans to open 45 to 50 new company-owned locations this year, which would be mid-teens unit growth. It also plans to open between 35 to 40 licensed restaurants. The company said last quarter that it would open up the most new Shake Shack locations in its history this year, while reducing construction costs by 10% despite tariffs. It notes that it is entering new geographies and seeing a lot of success, and recently had the highest sales openings in the history of the brand in the Southwest for a suburban location with a drive-thru. New York and California are more than 30% of Shake Shack's store base, so as it sees success in new markets, it has a long runway of expansion growth in front of it. It thinks it can support at least 1,500 locations in the U.S. over the long term, which would be about quadruple the number of U.S. locations it has today. Before you buy stock in Chipotle Mexican Grill, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Chipotle Mexican Grill wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Geoffrey Seiler has positions in Shake Shack. The Motley Fool has positions in and recommends Chipotle Mexican Grill and Starbucks. The Motley Fool recommends Cava Group and Dutch Bros and recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy. American-Made Growth: 4 Top Restaurant Stocks Fueling U.S. Expansion was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-05-2025
- Business
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Is a bear case emerging for Chipotle stock? Bernstein takes a look
-- Chipotle Mexican Grill (NYSE:CMG) has faced mounting scrutiny following a sharp decline in its share price, raising questions among investors about the strength of its long-term growth trajectory. The stock is down about 20% from its recent peak, after posting its first negative same-store sales growth (SSSG) quarter since the food safety crisis a decade ago, according to a research note from analysts at Bernstein in a note dated Friday. Bernstein analysts outline three core arguments fueling the emerging bear case. The first centers on market share concerns, with investors worried that Chipotle may lose ground to quick-service restaurant chains amid rising promotional activity. However, Bernstein counters that Chipotle has preserved pricing discipline. Despite industry-wide discounting, Chipotle maintains price points that are roughly 15%–20% below those of other fast-casual options, which Bernstein believes strengthens its value proposition to consumers. The second concern is the perceived lack of near-term catalysts in the face of broader macroeconomic pressure. The analysts acknowledge that the first quarter of 2025 marked a low point, but argue that a recovery could begin as early as the second quarter. Contributing factors include increased summer marketing spending, set to rise by 30% year-over-year, ongoing improvements in order throughput, and a new limited-time offer aimed at reigniting consumer interest. The third pillar of the bear case suggests Chipotle is entering a slower growth phase and should therefore be valued more conservatively. The company currently trades at a price-to-earnings multiple of 45.6x on 2024 earnings, with that figure projected to fall to 33.7x by 2026. While bears argue this de-rating reflects a structurally lower growth profile, Bernstein disagrees. The analysts maintain that Chipotle's long-term growth algorithm remains intact, citing mid-single-digit SSSG, 8%–10% annual unit growth potential, and resilient restaurant-level margins. They emphasize that only half of Chipotle's stores have hit throughput targets, leaving room for operational improvement. Notably, Chipotle's restaurant-level margins remain the highest in the industry at 26.8%, ahead of Taco Bell's 24.4% and McDonald's (NYSE:MCD) 14.8%. Bernstein attributes this resilience to efficient cost management and strong incremental margins, which are projected to be around 40%. Despite the recent negative sentiment, Bernstein raised its price target on the stock from $60 to $65, implying a 28% upside from the May 22 close at $50.78. The valuation is based on a forward P/E of 43x on projected 2026 EPS of $1.50. While the brokerage acknowledges near-term volatility driven by macro uncertainty and weaker Q1 performance, Bernstein argues that these are not signs of long-term structural decline. Instead, the analysts believe the market may be underestimating Chipotle's capacity for a near-term sales rebound and sustained margin strength. Related articles Is a bear case emerging for Chipotle stock? Bernstein takes a look Nvidia shares are 'attractively valued' says Stifel TSX outperformance could hold, Canada Cycle Indicator nears two-year high - BofA Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
