Chipotle with that staggering nosedive
Chipotle with that staggering nosedive
First of, do people still eat ?
My Thoughts:
Chipotle’s still got a solid business model. The brand is strong, margins are good, and the Chipotlanes + digital sales (about 36%) are solid drivers. ROIC is impressive too.
That said, demand has cooled off lately, this is the second quarter in a row with negative same-store sales. People seem to be spending less, and management is now expecting 2025 to be pretty flat.
Stock buybacks are happening, which is nice, but at these high valuation levels, they don’t really add a safety cushion; they’re mostly just keeping dilution in check.
What I Think It’s Worth:
I’m being a bit cautious in my assumptions: slow sales growth for a bit, some margin pressure, and a bit of a valuation pullback. That still gets me to about 14% earnings growth. Using a PE of 32 and a 10% discount rate, I land at a fair value around $46, basically where the stock is trading now.
What I’m Doing:
I like the company a lot, but I’m not ready to jump in at this price. There’s just not enough wiggle room if things go sideways. For now, I’ll keep an eye on it and wait for a better entry point.
I think they make good burritos, its still talked about everyone i talk to when it comes to fast food. Growing wise idk, do they have stores in other countries
