| Stock (Symbol) | Stock Price | |
Chipotle (CMG) |
$282 |
|
| Data is as of | Expected to Report | Sector |
May 19, 2011 |
Jul 20 |
Retail & Restaurant |
| Sharek’s Take | ||
 Last quarter the Chipotle question was: “When will it end?” Well, the 40% growth just ended. Profits and sales are still solid, both rose 20% last quarter, but higher food costs held back profits.
Chipotle had 12% same store sales growth last quarter — so I can’t suggest selling the entire position. You can sell half your position, but hold the other half for the long-term.T he company could raise prices in the third quarter of this year and that would boost profits. |
||
| One-Year Chart | ||
 The one-year chart shows profit growth falling from 48% to 23%. That’s not good when you have a P/E of 41.
Since Chipotle’s future is so bright — it’s rolling out a Chinese theme later this year that could be the next catalyst — I can’t say the stock is due for a fall. In fact CMG is holding up well since it announced last quarter’s earnings. |
||
| Earnings Table | ||
 Chipotle’s profits 23% last quarter on a 24% increase in sales. The sales are solid — especially with 12% same-store sales growth. Normally that translates into phat profit growth but the bills were highCMG beat by 20 cents 2QtrsAgo and only 2 cents last quarter. Momentum was hurt on that move.
Annual Profit Estimates still rose — especially 2012 and 2013 estimates. That’s good, and shows why it might be a good idea to own CMG. Quarterly estimates show mainly mid-20% growth after next quarter. Maybe 30% growth if CMG beats the street. Maybe more if these estimates increase before then (they have been). Maybe I’m being a little too bearish on this stock? |
||
| Fair Value | ||
 Last quarter I gave CMG a Fair Value of 40 times earnings. I can’t do that again. This is now a 20-something percent grower. A P/E of 35 means this stock could be at this price next year. |
||
| Ten-Year Chart | ||
 Chipotle is extended in the ten-year chart. This stock needs to digest some of the gains made in 2009 and 2010. Notice along the bottom that profit growth was 67% and 43% the past two years — and is expected to be 21% this year. |
||
| Power Ranking | Bottom Line | |
Growth Portfolio
17 of 20 |
CMG is ranked 17th in the 20 stock Growth Portfolio. I think the stock is fairly valued now and could stay in this range through next year. I probably won’t sell because this is a great brand, a long-term buy-and-hold stock.
CMG is not in the Aggressive Growth Portfolio. If it were I would sell it. |
|
Aggressive Growth Portfolio
N/A |
||
