Chipotle Mexican Grill may be overvalued but the 29 analysts following the company give it an average rating of buy because of its strong growth indicators. The analysts have set target prices ranging from $1550.0 to $2140.0 per share, for an average of $1881.93. At today's price of $1980.0, Chipotle Mexican Grill is trading 5.21% away from its average target price, suggesting there is an analyst consensus of little upside potential.
Chipotle Mexican Grill, Inc., together with its subsidiaries, owns and operates Chipotle Mexican Grill restaurants. Based in Newport Beach, CA, the large-cap Consumer Discretionary company has 104,958 full time employees. Chipotle Mexican Grill has not offered a dividend during the last year.
Chipotle Mexican Grill has a trailing twelve month P/E ratio of 62.5, compared to an average of 22.33 for the Consumer Discretionary sector. Based on its EPS guidance of 51.49, the company has a forward P/E ratio of 38.5. Based on the 33.0% compound average growth rate of Chipotle Mexican Grill's historical and projected earnings per share, the company's PEG ratio is 1.56. This EPS growth rate is likely not sustainable, so will substitute the broader market's 5-year projected EPS growth rate of 10.9%, which gives us a PEG ratio of 4.73. This suggests that these shares are overvalued.
Furthermore, Chipotle Mexican Grill is likely overvalued compared to its book value, since its P/B ratio of 23.1 is higher than the sector average of 3.12. The company's shares are currently trading 911.5% above their Graham number, implying that they are overvalued in terms of earnings and book value.
If analysts are giving the the company a decent rating despite its hefty price point, it could be related to its strong cash flows. They might also believe that Chipotle Mexican Grill's positive revenue and margin growth trend will continue.
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $5,586 | $5,985 | $7,547 | $8,635 |
| Revenue Growth | n/a | 7.13% | 26.11% | 14.41% |
| Gross Margins | 20.4% | 17.4% | 22.6% | 23.9% |
| Gross Margins Growth | n/a | -14.71% | 29.89% | 5.75% |
| Operating Margins | 8.4% | 5.4% | 10.9% | 13.7% |
| Operating Margins Growth | n/a | -35.71% | 101.85% | 25.69% |
| Net Margins | 6.27% | 5.94% | 8.65% | 10.41% |
| Net Margins Growth | n/a | -5.26% | 45.62% | 20.35% |
| Earnings Per Share | $12.38 | $12.52 | $22.9 | $31.68 |
| EPS Growth | n/a | 1.13% | 82.91% | 38.34% |
| Diluted Shares (MM) | 28 | 28 | 29 | 28 |
| Free Cash Flow (MM) | $388 | $290 | $840 | $844 |
| FCF Growth | n/a | -25.08% | 189.03% | 0.53% |
| Capital Expenditures (MM) | -$334 | -$373 | -$442 | -$479 |
| Net Debt / EBITDA | 3.15 | 3.54 | 2.52 | 2.25 |
