Chipotle Scores 69% in Growth Investor Model Despite Weakness

Chipotle Mexican Grill, Inc. receives a 69% rating under the Growth Investor model, indicating potential despite some challenges. The analysis reflects both positive trend indicators and concerning performance metrics.

Date: 15-02-2025

AI Rating: 5

Stock Performance Summary

Chipotle Mexican Grill, Inc. (CMG) has been evaluated based on the Growth Investor model, resulting in a 69% rating, which indicates a moderate level of interest in the stock. Despite showing some strong indicators, there are significant areas of concern that investors should consider.

Key Areas of Concern

P/E Ratio: The stock fails this criterion, indicating potential overvaluation compared to earnings, which could deter investors.
Revenue Growth in Relation to EPS Growth: This also fails, suggesting that revenue growth is not translating effectively into earnings growth.
EPS Growth for Current Quarter Must be Greater Than Prior 3 Quarters: This requirement is unmet, raising concerns about the sustainability of earnings momentum.
EPS Growth for Current Quarter Must be Greater Than Historical Growth Rate: This failure indicates potential stagnation or decline in earnings improvement.

While Chipotle shows passing strength in metrics such as sales growth rate, current quarter earnings, and long-term EPS growth, the failures in fundamental assessments, especially regarding EPS and revenue performance, could negatively impact stock perception and price.

Overall Ratings

The mixed results from the Growth Investor model suggest that while there are some strengths, notably in earnings persistence and the total debt/equity ratio, the concerning weaknesses in EPS-related indicators and revenue growth could lead to cautious investor sentiment.

Investors might need to weigh these factors carefully before making investment decisions regarding Chipotle Mexican Grill, as the current environment displays both promise and risk.

Stocks: CMG