Exploring the Growth Potential of NYSE:CMG as It Nears a Breakout.

Growth investors are on the lookout for stocks displaying robust revenue and EPS growth. In this analysis, we'll assess whether CHIPOTLE MEXICAN GRILL INC (NYSE:CMG) aligns with growth investing criteria, especially as it consolidates and signals a possible breakout. As always, investors should conduct their own research, but CHIPOTLE MEXICAN GRILL INC has surfaced on our radar for growth with base formation, warranting further examination.

Evaluating Growth: NYSE:CMG

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:CMG has earned a 8 for growth:

• The Earnings Per Share has grown by an impressive 26.71% over the past year.
• Measured over the past years, CMG shows a very strong growth in Earnings Per Share. The EPS has been growing by 38.26% on average per year.
• The Revenue has grown by 15.19% in the past year. This is quite good.
• CMG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.20% yearly.
• CMG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.46% yearly.
• The Revenue is expected to grow by 13.52% on average over the next years. This is quite good.

How do we evaluate the Health for 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 11.07. This indicates that CMG is financially healthy and has little risk of bankruptcy at the moment.
• The Altman-Z score of CMG (11.07) is better than 97.71% of its industry peers.
• 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.
• Looking at the Current ratio, with a value of 1.62, CMG is in the better half of the industry, outperforming 77.10% of the companies in the same industry.
• With a decent Quick ratio value of 1.57, CMG is doing good in the industry, outperforming 77.10% of the companies in the same industry.

What does the Profitability looks like for NYSE:CMG

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:CMG scores a 8 out of 10:

• CMG has a better Return On Assets (16.47%) than 96.18% of its industry peers.
• CMG has a Return On Equity of 41.08%. This is amongst the best in the industry. CMG outperforms 92.37% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 18.07%, CMG belongs to the top of the industry, outperforming 90.84% of the companies in the same industry.
• The Average Return On Invested Capital over the past 3 years for CMG is above the industry average of 10.55%.
• The last Return On Invested Capital (18.07%) for CMG is above the 3 year average (14.38%), which is a sign of increasing profitability.
• With an excellent Profit Margin value of 13.51%, CMG belongs to the best of the industry, outperforming 80.92% of the companies in the same industry.
• CMG's Profit Margin has improved in the last couple of years.
• Looking at the Operating Margin, with a value of 17.27%, CMG is in the better half of the industry, outperforming 72.52% of the companies in the same industry.
• 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.

Looking at the Setup

Besides the Technical Rating, ChartMill assigns a Setup Rating to every stock to determine the degree of consolidation. This rating, ranging from 0 to 10, is updated daily and evaluates various short-term technical indicators. NYSE:CMG currently holds a 8 as its setup rating, suggesting a particular level of consolidation in the stock.

CMG has a bad technical rating, but it does show a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 58.50. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 57.90, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for CMG in the last couple of days, which is a good sign.

More Strong Growth stocks can be found in our Strong Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of CMG

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

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.