Does Chipotle Mexican Grill (CMG) Have a Long Runway for Growth? (2024)

FAQs

Does Chipotle Mexican Grill (CMG) Have a Long Runway for Growth? ›

Chipotle's combination of superior quality and speed of service has created a strong brand affinity, and the company is currently expanding its store count at a growth rate of 8%–10% annually.

The company plans to grow the business by leveraging its strengths of great tasting, classically-cooked food made from real ingredients, its compelling value proposition, strong new restaurant unit economics, and an efficient digitized second make line.

For full-year 2024, Chipotle is forecasting mid-to-high single-digit growth in comparable restaurant sales assuming current sales trends continue. In 2024, it counts on opening 285 to 315 new restaurants. with over 80% having Chipotlane.

Chipotle Mexican Grill

Its sales jumped 14.3% year over year in 2023, with growth accelerating to 15.4% in the final quarter of the year. Additionally, earnings per share soared as the company's full-year operating margin expanded from 13.4% in 2022 to 15.8%.

Margin Expansion to Sustain Surging Profits

You might have noticed that Chipotle's 27% year-over-year increase in operating cash flow over the past 12 months significantly outpaces its revenue growth. This can be attributed to its steadily improving restaurant-level margins, driven by rising same-store sales.

A growth strategy is a long term approach in business that aims specifically at increasing an organisation's market share. Some common growth strategies in business include market penetration, market expansion, product expansion, diversification and acquisition.

Due to the early successes with the platform, Cultivate Next has made an incremental investment in Local Line. Chipotle will also leverage Local Line to fund grants to local farms within 350 miles of its new restaurants. The company plans to open 285 to 315 new locations in 2024.

CMG Stock 12 Month Forecast

Based on 26 Wall Street analysts offering 12 month price targets for Chipotle in the last 3 months. The average price target is $3,263.27 with a high forecast of $3,600.00 and a low forecast of $2,700.00. The average price target represents a 3.66% change from the last price of $3,147.98.

Chipotle is generating record revenue and profit

As for the business itself, Chipotle is putting up record financial results with $9.9 billion of revenue and $1.2 billion of net income for 2023, up 14.3% and 36.7%, respectively.

The company's earnings per share (EPS) are projected to be $15.57, reflecting a 23.08% increase from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $2.92 billion, indicating a 16.26% growth compared to the corresponding quarter of the prior year.

Is Chipotle considered a growth stock? ›

One of the top growth stocks in the restaurant business is undoubtedly Chipotle Mexican Grill (NYSE: CMG). It's often associated with high growth and success, with its strong numbers serving as benchmarks for other businesses.

One of the keys to Chipotle's success is its small menu. A smaller menu has three benefits. First, since Chipotle only stocks fresh ingredients, there is always a chance of food spoilage. The small menu reduces the number of ingredients needed on-hand, thus reducing the likelihood of waste.

Chipotle continues to generate impressive growth in an inflationary environment. It's still opening stores as it expands its restaurant-level operating margins. But high expectations have already been baked into its premium valuation.

The company continued to prioritize its “Food With Integrity” philosophy, emphasizing the use of responsibly-sourced ingredients and naturally-raised meats. In 2006, McDonald divested its stake in Chipotle, allowing the company to operate fully as an independent entity.

Who owns the most shares of Chipotle (CMG)? Vanguard owns the most shares of Chipotle (CMG).

The other three key focus areas for Chipotle moving forward include providing great food with integrity while delivering exceptional in-restaurant and digital experiences, developing and retaining diverse talent at every level, and amplifying technology to drive digital growth and productivity.

A growth strategy is an organization's plan for overcoming current and future challenges to realize its goals for expansion. Examples of growth strategy goals include increasing market share and revenue, acquiring assets, and improving the organization's products or services.

Chipotle has a business strategy of setting themselves apart from their competitors by having a differentiated strategy, like unique brand and food. Their slogan is “food with integrity” and they pride themselves on this. They want to be known as the healthy fast casual alternative.

They turn to fast-casual restaurants like Chipotle to eat healthy food without sacrificing time. By focusing on this target market, Chipotle can gain customers with their philosophy of “Food with Integrity,” and attract an enormous loyal customer base who are often in need of a quick bite to eat with friends.