While growth is established for NYSE:CMG, the stock's valuation remains reasonable.

Last update: Jun 28, 2024

CHIPOTLE MEXICAN GRILL INC (NYSE:CMG) was identified as an affordable growth stock by our stock screener. NYSE:CMG is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Unpacking NYSE:CMG's Growth Rating

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:CMG was assigned a score of 8 for growth:

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
The Revenue has grown by 13.61% in the past year. This is quite good.
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
CMG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.15% yearly.

Assessing Valuation for NYSE:CMG

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:

Based on the Price/Earnings ratio of 1.31, the valuation of CMG can be described as very cheap.
Based on the Price/Earnings ratio, CMG is valued cheaper than 98.51% of the companies in the same industry.
When comparing the Price/Earnings ratio of CMG to the average of the S&P500 Index (28.40), we can say CMG is valued rather cheaply.
A Price/Forward Earnings ratio of 0.92 indicates a rather cheap valuation of CMG.
100.00% of the companies in the same industry are more expensive than CMG, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.05, CMG is valued rather cheaply.
Based on the Price/Free Cash Flow ratio, CMG is valued cheaper than 100.00% of the companies 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.
CMG has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as CMG's earnings are expected to grow with 21.77% in the coming years.

Evaluating Health: NYSE:CMG

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:CMG has earned a 8 out of 10:

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.
CMG has a Altman-Z score of 3.23. This is amongst the best in the industry. CMG outperforms 82.09% of its industry peers.
CMG has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
CMG's Current ratio of 1.65 is fine compared to the rest of the industry. CMG outperforms 79.10% of its industry peers.
CMG has a Quick ratio of 1.61. This is in the better half of the industry: CMG outperforms 79.85% of its industry peers.

Evaluating Profitability: NYSE:CMG

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:CMG has earned a 8 out of 10:

CMG has a better Return On Assets (15.41%) than 91.79% of its industry peers.
CMG's Return On Equity of 38.57% is amongst the best of the industry. CMG outperforms 87.31% of its industry peers.
The Return On Invested Capital of CMG (17.08%) is better than 89.55% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CMG 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.
CMG has a better Profit Margin (12.70%) than 79.10% of its industry peers.
In the last couple of years the Profit Margin of CMG has grown nicely.
CMG has a Operating Margin of 16.34%. This is in the better half of the industry: CMG outperforms 69.40% of its industry peers.
In the last couple of years the Operating Margin of CMG has grown nicely.
CMG's Gross Margin has improved in the last couple of years.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

Our latest full fundamental report of CMG contains the most current fundamental analsysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.