Chipotle Mexican Grill (NYSE: CMG) has fallen 15% year-to-date, notably underperforming the S&P 500’s modest 1% gain. In the first quarter, revenue grew 6% to $2.88 billion, while adjusted EPS rose 7% to $0.29. However, comparable-restaurant sales declined 0.4%, driven by a 2.3% drop in transactions, despite a 1.9% increase in average check size. Operating margins contracted by 130 basis points to 26.2%, pressured by higher food and labor costs, as well as larger portion sizes. Additional headwinds include a projected 50-basis-point margin impact from tariffs. Looking ahead, Chipotle expects a difficult second quarter due to tough comparisons against last year’s 11.1% comp growth and the timing of a late Easter. For full-year 2025, the company projects low single-digit comparable sales growth, with traffic expected to turn positive in the second half.
That said, CMG stock appears expensive at its current price of around $51. While operational performance remains solid, minor concerns and elevated valuation levels suggest limited upside. See Buy or Sell Chipotle stock?
Our assessment, based on Chipotle’s historical and current financial condition across key dimensions such as growth, profitability, financial stability, and resilience, supports a cautious stance. For investors seeking more stable returns with less volatility, the Trefis High Quality Portfolio may offer a compelling alternative, having outperformed the S&P 500 with over 91% returns since inception.
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How does Chipotle Mexican Grill’s valuation look vs. the S&P 500?
Going by what you pay per dollar of sales or profit, CMG stock looks expensive compared to the broader market.
• Chipotle Mexican Grill has a price-to-sales (P/S) ratio of 6.1 vs. a figure of 2.8 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 32.6 compared to 17.6 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 44.7 vs. the benchmark’s 24.5
How have Chipotle Mexican Grill’s revenues grown over recent years?
Chipotle Mexican Grill’s Revenues have seen notable growth over recent years.
• Chipotle Mexican Grill has seen its top line grow at an average rate of 14.4% over the last 3 years (vs. increase of 6.2% for S&P 500)
• Its revenues have grown 14.6% from $10 Bil to $11 Bil in the last 12 months (vs. growth of 5.3% for S&P 500)
• Also, its quarterly revenues grew 6% to $2.9 Bil in the most recent quarter from $2.7 Bil a year ago (vs. 4.9% improvement for S&P 500)
How profitable is Chipotle Mexican Grill?
Chipotle Mexican Grill’s profit margins are around the median level for companies in the Trefis coverage universe.
• Chipotle Mexican Grill’s Operating Income over the last four quarters was $2.0 Bil, which represents a moderate Operating Margin of 17.5% (vs. 13.1% for S&P 500)
• Chipotle Mexican Grill’s Operating Cash Flow (OCF) over this period was $2.1 Bil, pointing to a moderate OCF Margin of 18.6% (vs. 15.7% for S&P 500)
• For the last four-quarter period, Chipotle Mexican Grill’s Net Income was $1.5 Bil – indicating a moderate Net Income Margin of 13.6% (vs. 11.3% for S&P 500)
Does Chipotle look financially stable?
Chipotle Mexican Grill’s balance sheet looks strong.
• Chipotle Mexican Grill’s Debt figure was $4.5 Bil at the end of the most recent quarter, while its market capitalization is $70 Bil (as of 5/20/2025). This implies a strong Debt-to-Equity Ratio of 6.6% (vs. 21.5% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $1.4 Bil of the $9.0 Bil in Total Assets for Chipotle Mexican Grill. This yields a strong Cash-to-Assets Ratio of 15.5% (vs. 15.0% for S&P 500)
How resilient is CMG stock during a downturn?
CMG stock has seen an impact that was slightly better than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
• CMG stock fell 38.1% from a high of $38.88 on 23 September 2021 to $24.08 on 14 June 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 26 April 2023
• Since then, the stock has increased to a high of $68.55 on 19 June 2024 and currently trades at around $51
Covid Pandemic (2020)
• CMG stock fell 50.2% from a high of $18.68 on 19 February 2020 to $9.30 on 18 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 11 May 2020
Global Financial Crisis (2008)
• CMG stock fell 74.6% from a high of $3.05 on 26 December 2007 to $0.77 on 20 November 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 15 June 2010
Putting all the pieces together: What it means for CMG stock
In summary, Chipotle Mexican Grill’s performance across the parameters detailed above is as follows:
• Growth: Very Strong
• Profitability: Neutral
• Financial Stability: Very Strong
• Downturn Resilience: Neutral
• Overall: Strong
But given its very high valuation, the stock appears relatively expensive, which supports our conclusion that CMG is an expensive stock to buy.
The rich valuation of CMG stock limits its upside potential in the near-to-mid term. As an alternative, the Trefis Reinforced Value (RV) Portfolio, has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
