Yahoo Finance Chipotle Mexican Grill, Inc. (CMG) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Chipotle Mexican Grill (CMG)? Shares have been on the move with the stock up 6% over the past month. The stock hit a new 52-week high of $3384.04 in the previous session. Chipotle Mexican Grill has gained 47.2% since the start of the year compared to the 12.1% move for the Zacks Retail-Wholesale sector and the -1.4% return for the Zacks Retail - Restaurants industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 24, 2024, Chipotle reported EPS of $13.37 versus consensus estimate of $11.63 while it beat the consensus revenue estimate by 1.01%.
For the current fiscal year, Chipotle is expected to post earnings of $55.31 per share on $11.35 billion in revenues. This represents a 23.29% change in EPS on a 14.97% change in revenues. For the next fiscal year, the company is expected to earn $66.52 per share on $12.84 billion in revenues. This represents a year-over-year change of 20.26% and 13.11%, respectively.
Valuation Metrics
Chipotle may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Chipotle has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 60.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 19.5X. On a trailing cash flow basis, the stock currently trades at 59.1X versus its peer group's average of 9.8X. Additionally, the stock has a PEG ratio of 2.68. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Chipotle currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Chipotle fits the bill. Thus, it seems as though Chipotle shares could have potential in the weeks and months to come.
How Does CMG Stack Up to the Competition?
Shares of CMG have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Brinker International, Inc. (EAT). EAT has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of B.
Earnings were strong last quarter. Brinker International, Inc. beat our consensus estimate by 7.83%, and for the current fiscal year, EAT is expected to post earnings of $4.47 per share on revenue of $4.35 billion.
Shares of Brinker International, Inc. have gained 6.2% over the past month, and currently trade at a forward P/E of 17.11X and a P/CF of 10.33X.
The Retail - Restaurants industry may rank in the bottom 63% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for CMG and EAT, even beyond their own solid fundamental situation.
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Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
Brinker International, Inc. (EAT) : Free Stock Analysis Report
