Down 32%, Is Chipotle a Once-in-a-Generation Investment Opportunity?

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Chipotle missed analysts’ expectations for revenue in the second quarter with the store’s sales decreased.
The company is still strongly profitable, and its plans are still long to develop the number of its stores on the right track.
Chipotle’s shares have not been traded with a low rate from price to profits for years.
10 shares we love better than the Mexican Chipotle grill ›

Mexican Chipotle grill (NYSE: CMG) She reported its financial results for the second quarter on Wednesday afternoon, and the disappointment of the market, at the very least. The profits of the modified company per share of Wall Street are identical, but its revenues amounting to $ 3.1 billion were less than expectations. In terms of closed on Wednesday, the shares fell by more than 14 % in the next session, and were still low by more than 12 % late on Friday.

This restaurant shares still serve as a long -term contract for its long -term investors, as it has increased by 102 % in the past five years only. But some pessimism has been sticking to it, and it is currently trading 32 % of its peak. Does this preparation make Chipotle the opportunity to invest once in the generation?

Photo source: Getty Images.

In the past few years, especially since the start of the Covid-19s, Chipotle has made some impressive financial offers. This is why its last weakness calls for the deepest diving.

All retail chains and restaurants focus extensively on growth The same store sales (AKA Comps), as this indicates its ability to pay revenue gains from current sites. Chipotle registered a growth in 7.9 % store sales in 2023 and 7.4 % in 2024. But in the first quarter of this year, its companies decreased by 0.4 % on an annual basis, and in the second quarter, it decreased by 4 %. The administration has reduced its guidance to say it now believes that Chipotle sales themselves will be flat.

The traffic decreased on foot, and was measured by a number of transactions, by 4.9 % in the second quarter. This follows a decrease of 2.3 % in the Q1. This is definitely what makes investors lose confidence. The current macroeconomic environment does not help the situation.

“I think much we are witnessing now is due to the macro, the consumer, the low -income consumer, looking for value,” said the CEO of Scott Boatwright in the profit call. The weakness of the consumer’s feeling is the clouds of work. “I think this may be the largest opposite wind we face,” he said.

It will be easy for investors to be busy with the conflicts of this last company. However, while they definitely deserve some attention, it is important to focus on the favorable Chipotle features. Its long -term horizons remain bright.

This is a profitable institution and is a golden standard operator in the restaurant industry. Chipotle Restaurant level Operation margin – scale This raises the costs of public companies to highlight how the front line stores-27.4 % in the Q2. The company has also confirmed operational efficiency. Recently, this meant the use of innovative tools, processes and technologies to increase productivity in its restaurants.

Even the last watermelon, Chipotle continued to expand in a quick clip. To date this year, it has opened 113 new stores. It plans to finish in 2025 after adding 330 new sites to its mark. Looking at its profit at the restaurant level and the average annual unit sales volume of more than $ 3.1 million, it is logical that the administration has kept its foot on the pedal.

There is now 3,839 Chipotle stores in total. However, the company aims to be much larger in the future. The administration repeated its goal of the presence of 7,000 locations in the United States and Canada one day. Revenue and profits will be much greater at this level of size.

Chipotle once was a high -quality stock. In the five years preceding its highest level ever in June 2024, the stocks increased by amazing 368 %. As a result of this performance, his evaluation was very slope, in my opinion.

This situation has changed. Investors can get shares today in The price ratio to profits Of the about 40 years. This is the cheapest double evaluation that has been circulated since July 2020. I will not go to the extent that Chipotle is one time chance in the generation, but investors still have to think about buying shares.

Before buying stocks in the Mexican Chipotle grill, think about this:

the Motley Adviser is a lie The analyst’s team has just identified what they think 10 best stocks For investors to buy now … the Mexican Chipotle barbecue was not one of them. The ten shares that made the pieces can produce monster revenues in the coming years.

Look at when Netflix This list was submitted on December 17, 2004 … if you invest $ 1,000 at the time of our recommendation, You will have $ 636,628!* Or when Nafidia This list was presented on April 15, 2005 … if you invest $ 1,000 at the time of our recommendation, You will have 1,063,471 dollars!

Now, it is worth noting Stock consultant The average total return is 1041%-Cruster superiority in the market compared to 183 % on the S&P 500. Stock consultant.

See the ten stocks »

*The stock consultant dates back from July 21, 2025

Neil Patel has no position in any of the mentioned shares. Motley Fool has positions in Chipotle Mexican Grill. Motley Fool recommends the following options: Short September 2025 $ 60 Calls on Chipotle Mexican Grill. Motley Fool has a disclosure policy.

32 % decrease, is Cheepotle the chance of investing once in the generation? It was originally published by Motley Fool

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2025-07-27 14:12:00

0 4 minutes read