What’s Next For Chipotle Stock?

Fast-casual restaurant chain Chipotle Mexican Grill (NYSE: CMG) is up 25% since the beginning of 2024, almost in line with the return of the S&P 500 over the same period. In comparison, CMG’s peer Starbucks stock (NASDAQ: SBUX) has increased about 20% over the same period.  See What’s Next For Starbucks’ Stock After An Upbeat Q1? So what’s happening with CMG stock? 

CMG stock growth is largely attributed to the company’s accelerated revenue growth in FY 2024, driven by factors such as menu innovation, price increases, and effective execution of digital strategies. The company’s impressive store economics are evident in its average restaurant sales, which rose 7% year-over-year (y-o-y) to $3.2 million in FY 2024. Notably, 257 of the 304 new locations added in FY 2024 feature a Chipotlane, a dedicated lane for digital order pickup, which contributed to its margin expansion. The company’s total restaurants stood at over 3700 by the end of 2024. Separately, if you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

Chipotle’s revenue grew 15% y-o-y to $11.3 billion in FY 2024, driven by a 7.4% increase in comparable-restaurant sales. This increase is attributed to higher transactions of 5.3% and a 2.1% increase in average checks. Digital sales continue to be strong, accounting for 35% of the core food and beverage business. The company’s operating profit has increased by 23% y-o-y, outpacing sales growth, thanks to expanding operating margins. Chipotle’s operating margin rose 110 basis points y-o-y to 16.9% in FY 2024, resulting in a 25% y-o-y in diluted earnings per share to $1.11. Furthermore, Chipotle’s international growth story is still in its early stages, with less than 50 locations established across the U.K., France, and Germany, and a recent entry into Kuwait. The global success of companies like McDonald’s, which operates over 40,000 restaurants worldwide, underscores the significant potential for Chipotle’s international expansion.

However, the company has reported volatile sales in 2025, impacted by weather-related events such as the Los Angeles wildfire. Despite healthy underlying transaction trends and a robust business plan, Chipotle anticipates low to mid-single-digit comparable sales growth for the full year 2025. The company plans to open 315-345 new locations in 2025, with over 80% featuring a Chipotlane. Looking ahead, Chipotle may encounter increased competition from established fast-food chains, such as McDonald’s (NYSE: MCD) and Domino’s, particularly in the drive-thru segment.

The increase in CMG stock over the last 4-year period has been far from consistent, with annual returns being considerably more volatile than the S&P 500. Returns for the stock were 26% in 2021, -21% in 2022, 65% in 2023, and 32% in 2024. The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is considerably less volatile. And it has comfortably outperformed the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.

We forecast Chipotle’s Revenues to be $12.8 billion for the fiscal year 2025, up 12% y-o-y. Looking at the bottom line, we now forecast the earnings per share to come in at $1.32. Given the changes to our revenues and EPS forecast, we have revised our estimate for Chipotle’s Valuation to $60 per share, based on a $1.32 expected EPS and a 45.7x P/E multiple for the fiscal year 2025 – about 5% higher than the current market price (Jan 10).

An additional benefit is that Chipotle has succeeded in areas with populations below 40,000 people. That gives the company the ability to meet its expectation that it can grow to 7,000 locations in North America alone (from ~3,500 locations at present). The story of its European growth has only just begun. There are only 27 locations across the UK, France, and Germany so far, and it recently entered into Kuwait. McDonald’s operates over 40,000 restaurants worldwide – demonstrating how far international success can take a company.

It is helpful to see how its peers stack up. Check out how Chipotle’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

[1] Returns as of 2/10/2025
[2] Cumulative total returns since the end of 2016