Chipotle Mexican Grill, Inc. (NYSE:CMG)

CAPS Rating: 2 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.

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Player Avatar jwilbanks (80.79) Submitted: 1/6/2012 5:03:31 PM : Underperform Start Price: $349.00 CMG Score: -11.53

The world is deleveraging, the consumer is tapped out, and this is a niche business that sells $8 burritos that is beyond the budget of most families. Who eats there besides young people? Their faithful followers will eventually tire of paying for a premium priced product that is mostly beans and rice and short on meat. Not to mention that it's a high fixed cost business with limited growth potential while priced for 30% cagr for the next 10 years and they only grew 20% last year which is unsustainable. All it will take is one bad headline from Europe, QE3, or a slight earnings miss and watch it implode like Netflix. It will happen soon too as GS just upgraded them so the retail investor gets in just in time for the big boys to get out.

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