Chipotle Stock Rated High Despite Key Fails in Report

Chipotle Mexican Grill Inc (CMG) has received a 69% rating based on growth metrics. However, the stock fails to meet key criteria related to P/E ratio and revenue growth relative to EPS growth. Investors should analyze these factors and their potential impact on stock performance.

Date: 15-03-2025

AI Rating: 5

**Chipotle Mexican Grill Inc Performance Review**
According to the analysis of Chipotle Mexican Grill Inc (CMG), the stock rates 69% based on several growth metrics, which is relatively high for the Growth Investor model. However, the report highlights critical areas that could affect investor confidence and stock prices.

**Earnings Per Share (EPS)**: The report indicates a failure in EPS growth for the current quarter compared to prior quarters, which is a negative sign for investors looking at earnings stability. This failure could impact investor sentiment and expectations for future performance. Hence, the rating for EPS growth would be **4** as it suggests a strongly negative outlook related to earnings stability.

**Revenue Growth**: Similarly, the revenue growth in relation to EPS growth is rated as a failure. This aspect raises concerns about the firm's ability to convert revenue into earnings, signifying potential issues in operational efficiency or profitability. This aspect might lead investors to reassess the overall growth potential of the company, warranting a rating of **4** as well.

**Positive Indicators**: There are several positive metrics worth noting. The stock passes in categories like sales growth rate, current quarter earnings, quarterly earnings compared to one year ago, positive earnings growth rate for the current quarter, earnings growth rate over the past several quarters, earnings persistence, and long-term EPS growth. These strong points suggest that the company has positive momentum in these areas.

**Debt Management**: The total debt/equity ratio also passes, indicating that the company is managing its debt effectively, which is a positive sign for risk-averse investors. However, the positive attributes might not be sufficient to outweigh the notable failures concerning EPS and revenue growth relative to EPS.

Overall, while Chipotle shows some strengths, the key weaknesses identified may hinder stock performance in the near term, leading to a moderate rating reflecting investor caution with a total rating of **5** for the overall sentiment. Key points of failure in critical metrics should prompt investors to be wary and consider the potential volatility in the stock price.

Stocks: CMG