When you look at NYSE:CMG, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Last update: Jun 28, 2024

Discover CHIPOTLE MEXICAN GRILL INC (NYSE:CMG), an undervalued stock highlighted by our stock screener. NYSE:CMG showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

Understanding NYSE:CMG's Valuation Score

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:CMG, the assigned 9 reflects its valuation:

With a Price/Earnings ratio of 1.31, the valuation of CMG can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of CMG indicates a rather cheap valuation: CMG is cheaper than 98.51% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.40. CMG is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 0.92, the valuation of CMG can be described as very cheap.
100.00% of the companies in the same industry are more expensive than CMG, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of CMG to the average of the S&P500 Index (20.05), we can say CMG is valued rather cheaply.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CMG indicates a rather cheap valuation: CMG is cheaper than 100.00% of the companies listed in the same industry.
CMG's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of CMG may justify a higher PE ratio.
CMG's earnings are expected to grow with 21.77% in the coming years. This may justify a more expensive valuation.

Assessing Profitability for NYSE:CMG

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:CMG has achieved a 8:

With an excellent Return On Assets value of 15.41%, CMG belongs to the best of the industry, outperforming 91.79% of the companies in the same industry.
CMG's Return On Equity of 38.57% is amongst the best of the industry. CMG outperforms 87.31% of its industry peers.
CMG has a Return On Invested Capital of 17.08%. This is amongst the best in the industry. CMG outperforms 89.55% of its industry peers.
CMG had an Average Return On Invested Capital over the past 3 years of 14.38%. This is above the industry average of 10.07%.
The last Return On Invested Capital (17.08%) for CMG is above the 3 year average (14.38%), which is a sign of increasing profitability.
With a decent Profit Margin value of 12.70%, CMG is doing good in the industry, outperforming 79.10% of the companies in the same industry.
In the last couple of years the Profit Margin of CMG has grown nicely.
Looking at the Operating Margin, with a value of 16.34%, CMG is in the better half of the industry, outperforming 69.40% of the companies in the same industry.
CMG's Operating Margin has improved in the last couple of years.
CMG's Gross Margin has improved in the last couple of years.

Health Insights: NYSE:CMG

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:CMG, the assigned 8 reflects its health status:

CMG has an Altman-Z score of 3.23. This indicates that CMG is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.23, CMG belongs to the top of the industry, outperforming 82.09% of the companies in the same industry.
There is no outstanding debt for CMG. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
CMG has a better Current ratio (1.65) than 79.10% of its industry peers.
The Quick ratio of CMG (1.61) is better than 79.85% of its industry peers.

Looking at the Growth

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:CMG scores a 8 out of 10:

CMG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.97%, which is quite impressive.
The Earnings Per Share has been growing by 38.26% on average over the past years. This is a very strong growth
CMG shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.61%.
Measured over the past years, CMG shows a quite strong growth in Revenue. The Revenue has been growing by 15.20% on average per year.
The Earnings Per Share is expected to grow by 20.75% on average over the next years. This is a very strong growth
Based on estimates for the next years, CMG will show a quite strong growth in Revenue. The Revenue will grow by 14.15% on average per year.

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Check the latest full fundamental report of CMG for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.