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Newport Beach, California-based Chipotle Mexican Grill, Inc. (CMG) operates quick-casual and fresh Mexican restaurant chains. Its offerings include burritos, quesadillas, tacos, salads, and more. With a market cap of $73.6 billion, Chipotle’s operations span the U.S., Canada, France, Germany, Dubai, and the U.K.
Companies worth $10 billion or more are generally described as "large-cap stocks," Chipotle fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size and influence in the restaurant industry. The company’s extensive operations span over 3,700 restaurants across the U.S. and internationally.
Despite its notable strengths, Chipotle's stock has tanked 23.2% from its all-time high of $69.26 touched on Jun. 18, 2024. Furthermore, CMG stock has plunged 16.8% over the past three months, underperforming the AdvisorShares Restaurant ETF’s (EATZ) 6.3% decline during the same time frame.
Chipotle’s performance has remained grim over the longer term as well. CMG stock has dipped 2.3% over the past 52 weeks and 32 basis points over the past six months, lagging behind EATZ’s 16.4% surge over the past year and 12.3% returns over the past six months.
To confirm the recent downturn, CMG has remained consistently below its 50-day moving average since late December 2024 and below its 200-day moving average since early January 2025.
Chipotle’s stock prices declined 2.6% in the trading session after the release of its mixed Q4 results on Feb. 4. Driven by new restaurant openings and a notable 5.4% year-on-year increase in comps, the company delivered a solid 13.1% year-over-year surge in total revenues to $2.8 billion. However, Chipotle’s topline missed the Street’s expectations which unsettled investor confidence. Meanwhile, the company reported an impressive 18.8% year-over-year growth in adjusted net income to $340 million and its adjusted EPS of $0.25 surpassed the consensus estimates by 4.2%, which mitigated the drop in stock prices.
Despite the increase in food, beverage, and packaging expenses, the company reported a 57-basis-point expansion in net margin compared to the year-ago quarter to 11.9% for Q4 by decreasing its spending on other operating expenses. However, moving forward in FY 2025, Chipotle’s margins are expected to contract due to the impact of potential tariffs on Mexican imports, which has led to investors taking a more cautious position on CMG.
Meanwhile, has also lagged behind its peer McDonald's Corporation’s (MCD) 5.1% gains over the past year and 6.2% returns over the past six months.
Despite its underperformance over the past year, analysts remain confident in CMG’s fundamentals and prospects. It has a consensus “Moderate Buy” rating among the 31 analysts covering the stock. CMG’s mean price target of $66.42 indicates a 24.9% upside potential from current price levels.
