Chipotle Mexican Grill stock (NYSE: CMG) is causing some serious heartburn for investors. With its fiscal fourth-quarter results looming, scheduled for release on Tuesday, February 6, the big question on Wall Street’s mind is whether the stock, already *up 11%* this year, has further room to run, or if it’s preparing to take a tumble off the guac wagon. Chipotle, known for its fresh and organic ingredients in burritos and salads, has been increasingly dependent on price hikes to bolster its performance. This has helped manage profitability, with a robust balance sheet featuring $1.8 billion in cash, restricted cash, and investments, *and absolutely no debt.* The company’s expansion strategy, involving a slew of new restaurants, along with the introduction of Chipotlanes, has received a hearty thumbs-up from investors. Pegged on impressive restaurant-level operating margins, menu innovations, and the successful harnessing of digital strategies, CMG has managed to serve up a tasty treat to stakeholders.
A Checkered Performance: The Rollercoaster Ride of CMG Stock
CMG stock has experienced a wild ride, with staggering gains of 75% from early January 2021 to the present, outperforming the S&P 500, which managed just an approximately 30% increase over this period. Despite this impressive display, Chipotle’s stock has been anything but smooth sailing. It boasted returns of 26% in 2021, then suffered a disappointing -21% in 2022, only to spike up by 65% in 2023. These fluctuations, when compared to a rollercoaster, seem to epitomize the uphill battle faced by individual stocks in the consumer discretionary sector. Even heavyweights in the domain, such as AMZN, TSLA, HD, GOOG, MSFT, and AAPL, have found taming the stock market juggernaut to be a Herculean task. In stark contrast, the Trefis High Quality (HQ) Portfolio has managed to outshine the S&P 500 every year since 2016, perhaps eliciting an envious glare from CMG stockholders. The looming question now is, can Chipotle repeat its past underwhelming performances, or is it poised to soar to new heights?
Our forecast pegs Chipotle’s valuation at a remarkable $2378 per share, almost in line with its current market price. Investors hungry for more detailed insights can feast on our interactive dashboard analysis on “Chipotle Earnings Preview: What To Expect in Q4?”.

The Main Course: Expectations for Q4 Results
(1) Revenues expected to come in line with the consensus estimates
Trefis forecasts Chipotle’s Q4 2023 revenues to settle at approximately $2.5 billion, aligning with the consensus estimate. In Q3, the company witnessed an 11% year-on-year revenue growth, propelling sales to $2.5 billion, with comp restaurant sales climbing 5.0%. A significant portion of this growth can be traced back to new locations. The company’s operational margin also thrived, hitting 16.0% in Q3 – a noticeable increase from 15.1% during the same period the previous year. For the entire year of 2023, our projections suggest Chipotle’s revenues will scale the $9.8 billion summit, representing a commendable 14% year-on-year escalation. The company’s management, ever the visionaries, seem to be eyeing a jaw-dropping 7,000 Chipotle locations in North America, a significant leap from the current tally of about 3,321. Moreover, with a smattering of locations in Canada, the UK, France, and Germany, the potential for expansion seems limitless, provided the concept continues to sizzle across diverse cultures.
(2) EPS is also likely to match consensus estimates
Chipotle’s Q4 2023 earnings per share (EPS) are anticipated to clock in at $9.73 as per Trefis analysis, syncing up with the consensus estimate. The gleaming gem in Chipotle’s crown appears to be its restaurant-level margin, which notched up an impressive 26.3% in Q3, marking a 100 basis points improvement from the previous year. Consequently, the company’s diluted earnings per share soared by a noteworthy 23% year-on-year, reaching $11.32. It’s worth noting that Chipotle’s digital orders, with their enviable high margins, seem to be steering the ship toward continued profit growth in the long run.
(3) Stock price estimate aligns with the current market price
Based on our Chipotle Valuation, the estimated EPS of approximately $44.45, paired with a P/E multiple of 53.5x in fiscal 2023, paints a picture of a price around $2377.75, almost mirroring the current market price. Notably, Chipotle’s lofty valuation towers over popular restaurant stocks, boasting a 26x P/E ratio for McDonald’s (NYSE: MCD) and 25x for Starbucks (NASDAQ: SBUX). Delving deeper, a comparison with its peers through CMG Peers could provide some useful insights into where CMG stock stands within its domain.
Returns | Feb 2024 MTD [1] |
Since start of 2023 [1] |
2017-24 Total [2] |
CMG Return | 3% | 79% | 558% |
S&P 500 Return | 2% | 29% | 121% |
Trefis Reinforced Value Portfolio | 1% | 39% | 614% |
[1] Returns as of 2/5/2024
[2] Cumulative total returns since the end of 2016
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.