Chipotle Mexican Grill Inc (CMG, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial performance and promising growth prospects. With a current share price of $54.51, Chipotle has experienced a daily increase of 4.47%, despite a three-month decline of -14.74%. A detailed analysis, supported by the GF Score, indicates that Chipotle Mexican Grill Inc is poised for significant future growth.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, assessing stocks based on five key valuation aspects. These aspects have been proven to correlate strongly with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield higher returns. The GF Score ranges from 0 to 100, with 100 indicating the highest potential for outperformance. Chipotle Mexican Grill Inc boasts a GF Score of 92, signaling strong future performance potential.
- Financial strength rank: 6/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 6/10
Understanding Chipotle Mexican Grill Inc's Business
Chipotle Mexican Grill is a leading player in the U.S. fast-casual restaurant industry, boasting systemwide sales of $9.9 billion in 2023. With a market cap of $74.65 billion and annual sales of $10.66 billion, Chipotle operates nearly 3,440 stores primarily in the U.S., with a smaller presence in Canada, the UK, France, and Germany. The company is renowned for its burritos, tacos, and quesadillas, focusing on high-quality ingredients, competitive pricing, and fast service. All revenue is generated from restaurant sales and delivery fees.
Financial Strength and Profitability
Chipotle's financial resilience is evident in its Altman Z-Score of 10.48, indicating low risk of financial distress. The company's strategic debt management is reflected in its favorable Debt-to-Revenue ratio of 0.4. Furthermore, Chipotle's profitability is impressive, with an operating margin increase to 16.54% in 2023 from 8.56% in 2019. The consistent rise in Gross Margin over the past five years further highlights its efficiency in converting revenue into profit.
Growth Trajectory
Chipotle's commitment to growth is underscored by its high Growth rank of 10/10. The company's 3-Year Revenue Growth Rate of 19.2% outperforms 71.13% of its industry peers. Additionally, its EBITDA has seen significant increases, with a three-year growth rate of 51.5%.
Conclusion
Considering Chipotle Mexican Grill Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's strong position for potential market outperformance. Investors looking for similar opportunities can explore other high-scoring companies using the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
