Chipotle Mexican Grill, Inc. (NYSE:CMG)

CAPS Rating: 3 out of 5

A fast-casual restaurant chain, Chipotle Mexican Grill focuses on fresh and organic ingredients, tempting diners with gigantic burritos, salads, and more.


Player Avatar buffalonate (94.22) Submitted: 3/9/2011 11:24:24 AM : Underperform Start Price: $248.99 CMG Score: -33.40

This stock is way overvalued. It has a p/e ratio of 42 and an expected growth rate of 19% over the next couple of years. Even if they drastically outperform their estimates the stock is still overvalued. If you want better value buy Buffalo Wild Wings or Texas Roadhouse.

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Member Avatar baselineace (33.67) Submitted: 3/10/2011 7:24:34 PM
Recs: 0

Aren't better returns more favorable than better value?

Member Avatar buffalonate (94.22) Submitted: 3/14/2011 1:36:41 PM
Recs: 0

This stock is going nowhere but down. Why do I say that? People fall in love with growth stocks and bid them up way past their actual value. The p/e of a company should roughly equal its growth rate. Read The Motley Fool's Guide to Investing or Peter Lynch's One Up On Wallstreet if you want proof of that. If Chipotle misses estimates one quarter it could easily fall 50% because it is extremely overvalued right now. The PEG ratio for this company is 1.85 which is very high. Buy this company when its PEG ratio is 1.20 or below and that is a fair valuation. My point if you need to get out of your position. It is a great company I agree but put this one on your watchlist and wait for it to miss its earnings estimate and then when this stock crashes back to its real value back the truck up and load up on this stock. I bought Buffalo Wild Wings a few years ago because it is a great company. I did this only after it missed its earnings estimate and crashed back to a decent value. I loaded up on the stock and its value is now up 158%. I hope you take my advice because it is good advice.

Member Avatar baselineace (33.67) Submitted: 4/18/2011 9:26:19 PM
Recs: 0

Likewise I should suggest you take an IBD course.

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