Chipotle Mexican Grill Stock at Support Zone – Bargain or Trap?
Chipotle Mexican Grill (CMG) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($32.23 – $35.63), levels from which it has bounced meaningfully before. In the last 10 years, Chipotle Mexican Grill stock received buying interest at this level 3 times and subsequently went on to generate 45.2% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 7/21/2021 | 10.7% | 64 |
| 3/16/2023 | 32.5% | 124 |
| 10/13/2023 | 92.4% | 249 |
Yet, a support zone alone isn’t enough; rebounds are more likely when fundamentals, sentiment, and market conditions line up. How does that look for CMG?
Rebound unlikely due to transaction declines & macro pressure.
Chipotle’s Q3 2025 comparable sales growth of 0.3% masked a third consecutive quarter of transaction declines, down 0.8%. Macroeconomic pressures, including inflation and consumer price sensitivity, are significantly impacting traffic, particularly for lower-income segments. Despite digital strength and new Chipotlane openings, operating margins are pressured by rising ingredient costs and tariffs. While holiday promotions aim to boost engagement, the revised full-year comp sales forecast to a low-single-digit decline reflects persistent headwinds. Analyst targets, though mostly “Buy,” were often lowered, signaling caution. A sustained rebound requires a clear reversal in transaction trends and easing of macro challenges.
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How Do CMG Financials Look Right Now?
- Revenue Growth: 7.3% LTM and 11.9% last 3-year average.
- Cash Generation: Nearly 13.3% free cash flow margin and 16.9% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for CMG was 7.3%.
- Valuation: CMG stock trades at a PE multiple of 34.0
| CMG | S&P Median | |
|---|---|---|
| Sector | Consumer Discretionary | – |
| Industry | Restaurants | – |
| PE Ratio | 34.0 | 23.5 |
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| LTM* Revenue Growth | 7.3% | 6.1% |
| 3Y Average Annual Revenue Growth | 11.9% | 5.4% |
| Min Annual Revenue Growth Last 3Y | 7.3% | 0.2% |
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| LTM* Operating Margin | 16.9% | 18.8% |
| 3Y Average Operating Margin | 17.0% | 18.2% |
| LTM* Free Cash Flow Margin | 13.3% | 13.5% |
*LTM: Last Twelve Months | For more details on CMG fundamentals, read Buy or Sell CMG Stock.
And What If The Support Breaks?
Chipotle is no stranger to big drops. It plunged 75% in the Global Financial Crisis, nearly 50% in both the 2018 correction and the Covid pandemic, and about 38% during the inflation shock. Even with solid growth and strong fundamentals, the stock isn’t immune to market crashes. When risk aversion hits, drawdowns this steep are a real possibility.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, outlook changes. Read CMG Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
Still not sure about CMG stock? Consider the portfolio approach.
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