Chipotle Mexican Grill, Inc.
CMG
$0.00
+1.94%
Chipotle Mexican Grill is a leading fast-casual restaurant chain specializing in Mexican-inspired food. The company is defined by its commitment to ingredients with no artificial flavors and an efficient assembly-line service model.
CMG
Chipotle Mexican Grill, Inc.
$0.00
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Investment Opinion: Should I buy CMG Today?
Based on a synthesis of the data, the objective assessment is a Hold. The company's exceptional operational strength and cash flow provide a solid foundation, and the forward P/E suggests some earnings growth is priced in. However, the severe price decline, decelerating fundamentals, and high leverage create substantial near-term uncertainty. The stock appears to be in a transition phase where growth is normalizing from historically high levels. Investors should wait for clearer signs of margin stabilization and a reversal in the negative technical trend before considering new positions.
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CMG 12-Month Price Forecast
The analysis presents a conflict between a superb business model and deteriorating near-term momentum. The high ROE and FCF are compelling, but they are currently overshadowed by price action and margin trends. The path of least resistance appears sideways to slightly higher, contingent on operational execution.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Chipotle Mexican Grill, Inc.'s 12-month outlook, with a consensus price target around $0.00 and implied upside of — versus the current price.
Average Target
$0.00
6 analysts
Implied Upside
—
vs. current price
Analyst Count
6
covering this stock
Price Range
$0 - $0
Analyst target range
No sufficient analyst coverage available. The provided data includes institutional rating actions from various firms, with recent actions including upgrades to 'Buy' and 'Outperform' as well as reaffirmations of 'Hold' and 'Equal Weight' ratings. However, a consolidated summary of analyst consensus, including a specific target price and ratings distribution, is not available in the given data set.
Bulls vs Bears: CMG Investment Factors
Chipotle remains a fundamentally strong company with best-in-class operational metrics and cash generation. However, it faces significant headwinds from decelerating growth, margin pressure, and severe technical damage. The stock's premium valuation is being tested by these challenges.
Bullish
- Exceptional Operational Efficiency: ROE of 54.26% and ROA of 13.88% indicate superior capital allocation and profitability.
- Strong Free Cash Flow: TTM FCF of $1.45B provides flexibility for buybacks and growth investments.
- Premium Brand & Market Position: Leading fast-casual chain with a strong brand and high-quality ingredient focus.
- Attractive Forward P/E: Forward P/E of 23.5 is lower than trailing P/E, implying expected earnings growth.
Bearish
- Severe Technical Weakness: Stock down 48.8% from 52-week high, underperforming S&P 500 significantly.
- Decelerating Growth & Margins: Q4 revenue growth slowed to 4.9%, net margin declined from 14.2% to 11.1%.
- High Leverage & Valuation: Debt-to-equity of 3.48 and trailing P/E of 32.2 signal financial and valuation risk.
- Negative Market Sentiment: News highlights traffic declines, margin pressure, and high-profile investor exits.
CMG Technical Analysis
The stock has experienced significant weakness over the observed period, with the price declining from over $40 in October 2025 to around $32 by the end of March 2026. This downtrend is confirmed by a substantial 52-week drawdown of -48.82%, indicating severe selling pressure and a lack of sustained bullish momentum. Short-term performance has been poor, with the stock down 13.99% over the past month and 13.49% over the past three months. This underperformance is stark relative to the broader market, as indicated by negative relative strength figures of -8.7479 (1-month) and -8.8565 (3-month) against the S&P 500. The current price of $32.01 sits near the lower end of its 52-week range of $29.75 to $58.42, representing a decline of approximately 45% from the high. While the stock is not at its absolute low, its position deep in the lower half of the range reflects persistent bearish sentiment and technical weakness.
Beta
1.02
1.02x market volatility
Max Drawdown
-48.8%
Largest decline past year
52-Week Range
$30-$58
Price range past year
Annual Return
-36.8%
Cumulative gain past year
| Period | CMG Return | S&P 500 |
|---|---|---|
| 1m | -11.1% | -3.7% |
| 3m | -11.8% | -4.1% |
| 6m | -21.9% | -2.1% |
| 1y | -36.8% | +16.1% |
| ytd | -13.0% | -3.9% |
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CMG Fundamental Analysis
Revenue growth has shown some deceleration, with Q4 2025 revenue of $2.98 billion representing a 4.86% year-over-year increase. Profitability metrics have also softened; the Q4 2025 net margin was 11.09%, down from the Q2 2025 net margin of 14.24%, indicating recent pressure on bottom-line performance. The company's financial health shows a high degree of leverage, with a debt-to-equity ratio of 3.48. However, cash flow generation remains robust, with trailing twelve-month free cash flow of approximately $1.45 billion, providing significant financial flexibility for operations and shareholder returns via buybacks. Operational efficiency remains a standout strength, with a very high return on equity (ROE) of 54.26% and a solid return on assets (ROA) of 13.88%. These figures indicate the company continues to generate substantial profits from its equity base and assets, despite the recent margin compression.
Quarterly Revenue
$3.0B
2025-12
Revenue YoY Growth
+0.04%
YoY Comparison
Gross Margin
+0.23%
Latest Quarter
Free Cash Flow
$1.4B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CMG Overvalued?
Given the company's positive net income, the primary valuation metric is the price-to-earnings (P/E) ratio. The trailing P/E ratio is 32.22, while the forward P/E is 23.53, suggesting the market expects earnings growth. The price-to-sales (P/S) ratio is 4.15, and the enterprise value-to-sales (EV/Sales) is 3.83. Peer comparison data for industry averages is not available in the provided inputs. Therefore, an assessment of valuation relative to the sector cannot be made. The current multiples reflect a premium valuation, which is typical for a company with Chipotle's growth profile and high returns on capital, but they are being weighed against recent performance challenges.
PE
32.2x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 34x~92x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
24.8x
Enterprise Value Multiple
Investment Risk Disclosure
The primary risks are multifaceted. Financially, the high debt-to-equity ratio of 3.48 increases vulnerability to rising interest rates or an earnings downturn. Operationally, the company is experiencing margin compression, with the net margin declining over recent quarters, indicating potential pricing pressure or rising costs. The competitive and consumer environment presents a significant market risk, as recent news suggests a shift in dining patterns away from fast-casual towards value-oriented options, which could pressure traffic and same-store sales growth. Finally, sentiment and technical risks are pronounced, with the stock down nearly 50% from its high, persistent selling pressure, and negative relative strength, which could lead to further downside if institutional confidence erodes further, as hinted by Bill Ackman's exit.
FAQ
Key risks include: 1) High financial leverage (Debt/Equity of 3.48), 2) Recent margin compression, with net income margin declining, 3) A severe technical breakdown, with the stock down 48.8% from its high and underperforming the market, and 4) Competitive and consumer sentiment shifts, as news reports indicate diners may be trading down to value-oriented restaurants.
The 12-month outlook is mixed. The base case (50% probability) sees the stock trading between $35 and $42 as growth normalizes. A bull case (25%) could see a rally to $45-$52 on operational improvement, while a bear case (25%) risks a retest of the 52-week low near $29.75. The overall stance is neutral, with high uncertainty around consumer spending and margin trends.
CMG trades at a premium valuation with a trailing P/E of 32.2 and a P/S ratio of 4.15, which is typical for its high-growth history. This premium is now being questioned due to slowing growth. The forward P/E of 23.5 suggests the market expects earnings growth, making the stock fairly valued relative to its near-term prospects, but still expensive if growth continues to decelerate.
Currently, CMG is best rated as a Hold. While the company has exceptional operational metrics like a 54.26% ROE and strong cash flow, the stock is in a clear downtrend, down over 40% from its high, and faces headwinds like slowing revenue growth and margin compression. The forward P/E of 23.5 is more reasonable, but investors should wait for signs of stabilization before committing new capital.
CMG is more suitable for patient, long-term investors who can withstand volatility. The company's strong brand and operational model are long-term assets, but the stock requires time to recover from its technical damage and for fundamentals to re-accelerate. Short-term traders face significant risk due to the entrenched downtrend and negative momentum relative to the market.