Chipotle Mexican Grill shares fell by -2.9% during the day's morning session, and are now trading at a price of $41.44. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.
Chipotle Mexican Grill Has Elevated P/B and P/E Ratios:
Chipotle Mexican Grill, Inc., together with its subsidiaries, owns and operates Chipotle Mexican Grill restaurants. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 20.93 and an average price to book (P/B) ratio of 2.93. In contrast, Chipotle Mexican Grill has a trailing 12 month P/E ratio of 36.7 and a P/B ratio of 15.76.
Chipotle Mexican Grill has moved -25.8% over the last year compared to 19.6% for the S&P 500 — a difference of -45.4%. Chipotle Mexican Grill has a 52 week high of $66.74 and a 52 week low of $41.43.
Strong Revenue Growth and a Decent Current Ratio:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $5,586 | $5,985 | $7,547 | $8,635 | $9,872 | $11,314 |
| Operating Margins | 8% | 5% | 11% | 13% | 16% | 17% |
| Net Margins | 6% | 6% | 9% | 10% | 12% | 14% |
| Net Income (M) | $350 | $356 | $653 | $899 | $1,229 | $1,534 |
| Net Interest Expense (M) | $14 | $4 | $8 | $21 | $63 | $94 |
| Depreciation & Amort. (M) | $213 | $239 | $255 | $287 | $319 | $335 |
| Diluted Shares (M) | 1,415 | 1,421 | 1,426 | 1,403 | 1,386 | 1,377 |
| Earnings Per Share | $0.25 | $0.25 | $0.46 | $0.64 | $0.89 | $1.11 |
| EPS Growth | n/a | 0.0% | 84.0% | 39.13% | 39.06% | 24.72% |
| Avg. Price | $722.89 | $1060.86 | $1615.89 | $1445.2 | $2286.96 | $41.44 |
| P/E Ratio | 2891.56 | 4080.23 | 3512.8 | 2258.12 | 2569.62 | 37.0 |
| Free Cash Flow (M) | $388 | $290 | $840 | $844 | $1,223 | $1,511 |
| CAPEX (M) | $334 | $373 | $442 | $479 | $561 | $594 |
| Current Ratio | 1.61 | 1.73 | 1.58 | 1.28 | 1.57 | 1.52 |
Chipotle Mexican Grill benefits from rapidly growing revenues and increasing reinvestment in the business, strong operating margins with a positive growth rate, and exceptional EPS growth. The company's financial statements show generally positive cash flows and a decent current ratio of 1.52.
