Chipotle Mexican Grill, Inc. (CMG) recently rebounded from a small dip lower to move back within striking distance of the all-time high after reporting better than expected Q2 results in late July. Estimates have since been on the move, with the next-year estimate now projecting 19% growth for this Zacks #2 rank stock.
Second-Quarter Results
Chipotle gave the bulls something to cheer about on July 22 with better than expected Q2 results that were driven by higher volumes and continued expansion.
Revenue for the period was up 20% from last year to $467 million, with comparable store sales showing a solid 8.7% gain. Earnings also came in strong at $1.46, 5% ahead of the Zacks Consensus Estimate. Chipotle now has an average earnings surprise of 19% over the last four quarters.
The strong top-line results were accompanied by tight cost and expense management, with operating margin up 90 basis points from last year to 26.9%. The company also opened 25 new stores during the quarter for a grand total of 1,001, including its first presence in London.
Estimates Climb
The analysts were encouraged by the results, pushing the current-year estimate 9 cents higher to $5.08. The next-year estimate is up 16 cents on the good quarter to $6.05, a 19% growth projection.
Valuation
In light of the recent gains, CMG does look a bit pricey, trading with a forward P/E of 31X against its peer’s 19X.
2-Year Chart
CMG has spent most of the last 15 months trending higher before spiking on the news to move back within striking distance of the all-time high just above $155. The MACD below the chart recently turned bullish too, take a look below.
Read the May 19 CMG article here
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