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Reddit and DraftKings have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – November 13, 2025 – Zacks Equity Research shares Reddit (RDDT - Free Report) as the Bull of the Day and DraftKings (DKNG - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Chipotle Mexican Grill, Inc. (CMG - Free Report) , Starbucks Corp. (SBUX - Free Report) and CAVA Group, Inc. (CAVA - Free Report) .
Reddit is a Zack Rank #1 (Strong Buy) that operates a community-based social media platform organized around "subreddits," which are individual forums dedicated to specific interests, topics, and hobbies. Users post content, vote posts, and comments up or down, and engage in real-time discussions.
Reddit generates revenue mainly from advertising, and recently, from licensing its massive dataset to companies. especially AI firms, for model training and content insights.
The company just delivered an impressive quarter, but investors quickly shifted into profit taking. Shares pulled back right after the earnings release, then fell further during the broader market selloff. However, the stock has since rebounded and returned to the levels seen before earnings.
So now the question is if this stock is ready to take out all-time highs, or if there is a period of consolidation
About the Company
Reddit has quietly evolved from a quirky corner of the internet into one of the most powerful community platforms in the world. But with a unique model built around user-generated content, highly engaged communities, and a fast-growing advertising business, Reddit is now positioning itself as a data and content engine in the era of AI.
After years of operating privately, Reddit's push into monetization, including new partnerships with AI companies and expanding ad formats, is driving momentum.
RDDT is valued at $40 billion and has a forward PE of 88. The stock has Zacks Style Scores of "F" in Value, but "A" in Growth.
Q3 Earnings Beat
Reddit delivered a standout Q3, beating EPS by 51% and showing accelerating operating leverage. The company reported EPS of $0.80 vs. $0.52 expected and revenue of $585M vs. $543M expected. The quarter was fueled by surging advertiser demand and stronger user monetization.
Adjusted EBITDA hit $236M, more than doubling year over year, with margins expanding to 40.3% from 27% a year ago.
Key engagement metrics were equally strong: Daily active users reached 116 million, up 19% year over year, and ARPU climbed to $5.04, reflecting better ad performance and data licensing momentum.
Management guided for an even stronger Q4 with revenue of $655M–$665M (+53–55% y/y) and adjusted EBITDA of $275M–$285M, implying EBITDA growth approaching 80–85% with margins around 42%. Reddit highlighted rapid advertiser adoption, with active advertisers +75% y/y and ad revenue +74% y/y, driven by machine learning improvements, lower-funnel performance tools, and international expansion.
CEO Steve Huffman emphasized Reddit's differentiated platform, saying the site provides "authentic conversations you can't find anywhere else." The company believes it will exit the year with momentum and begin executing on its 2026 strategy focused on user growth, community expansion, traffic diversification, and scaling ad formats.
Estimates Head Higher
Since reporting earnings, analysts have been quick to lift earnings estimates.
For the current quarter, estimates have gone from $0.80 to $0.98 over the last 30 days. For next quarter, we see another big jump, with estimates going to $0.57 from $0.45.
For the current year, estimates have gone from $1.87 to $2.35, a jump of 25%.
The longer-term looks solid as well, with estimates for next year going from $9.16 to $9.55, an increase of 4%.
Analysts continue to raise their expectations following Reddit's strong results. Citigroup reiterated its Buy rating and increased its price target to $265 from $250, while B. Riley Securities also reaffirmed a Buy and lifted its target to $245 from $235. In addition, Bank of America raised its price target to $210 from $180 while maintaining a Neutral stance.
The Technical Take
RDDT exploded after consolidation post-IPO, moving from $50 to $230. However, the stock fell back under $100 earlier this year. The summer months were kind to RDDT investors, with the stock moving back over $200 and making a high of $282.95 back in September.
The stock has pulled back again, but tested a key support level last week in which it responded very positively.
If we draw a Fibonacci retracement from May lows to September highs, we get a 61.8% retracement support level at $166. The low last week for RDDT was $173 and from there it bounced violently to $213.
With the support line clearly drawn, the stock is trading between some moving average and could consolidate around the $200 level. This is a great spot to be building a position with risk at the 61.8% level, which happens to be the 200-day moving average as well
Let us look at those moving averages
21-day: $202
50-day: $220
200-day: $166.50
If the bulls can push price over the 50-day MA and the post-earnings highs, the stock should break out.
In Summary
Reddit is showing the kind of growth story investors look for. The company is scaling revenue at a rapid pace, improving profitability, and attracting analysts who continue to raise estimates and price targets.
Users are expanding, monetization is improving, and Reddit is becoming a key data provider in the artificial intelligence economy.
Technically, the stock is holding an important support level and now sits in a healthy consolidation zone, giving patient investors an attractive setup. With earnings estimates moving higher and momentum returning after profit taking, Reddit looks positioned to challenge its prior highs as we head toward year end.
DraftKings, a Zacks Rank #5 (Strong Sell), is on a cold streak after the stock has fallen over 40% from the summer highs.
Once a favorite among growth investors, the stock is now showing technical weakness with a clear downtrend forming on the chart. Recent results fell short of expectations, prompting analysts to cut earnings estimates and lower price targets.
While user engagement remains steady, rising costs, slowing revenue growth, and narrowing margins have raised concerns about profitability heading into next year.
With momentum turning negative and sentiment softening, DraftKings faces an uphill climb to regain investor confidence. Shares bounced off 2025 lows after the earnings report, but investors might want to cash out now, before the window closes.
About the Company
DraftKings is a digital sports entertainment and gaming company that offers daily fantasy sports, online sports betting, and iGaming products. The company operates a vertically integrated technology platform that allows users to participate in sports wagering and interactive gaming across multiple jurisdictions.
DraftKings has been a leader in the fast-growing U.S. sports betting market, leveraging partnerships with major leagues, teams, and media brands to expand its reach.
However, the company continues to face heavy competition, fluctuating promotional costs, and the challenge of achieving consistent profitability in a crowded and evolving industry.
The company has a market cap over $15B, with a Zacks Style Score of "F" in Value and Momentum.
Q3 Earnings Miss
DraftKings reported a disappointing Q3 8% EPS miss and management slashed its full-year outlook. The company posted an adjusted loss of $0.26 per share vs. $0.24 expected on revenue of $1.14 billion vs. $1.21 billion expected.
Slower growth and rising costs were the culprit, with average monthly unique payers rising just 2%, while revenue per payer increased 3% to $106. Adjusted EBITDA came in at a loss of $126.5 million, more than double the loss from a year ago.
Management cut its FY2025 revenue guidance to $5.9–$6.1 billion and EBITDA to $450–$550 million, down sharply from the prior outlook of $6.2–$6.4 billion in revenue and $800–$900 million in EBITDA.
While leadership emphasized optimism around new initiatives like DraftKings Predictions and expanded partnerships with ESPN and NBCUniversal, the weaker guidance overshadowed those positives.
The company did authorize a $1 billion increase to its share repurchase program, but the earnings miss, margin pressure, and cautious tone have left investors questioning the near-term trajectory for profitability.
Earnings Estimates
Analysts are taking numbers down, and with that price targets are headed lower.
Both the current quarter and next quarter are trending lower over the last 30 days, but the current year has seen a drastic drop over the last 60 days. Numbers for the year have dropped 22%, from $1.45 to $1.13.
Next year gets better, but number have fallen 7% over that same time frame, falling from $2.18 to $2.02.
Several major brokers have reiterated positive ratings on DraftKings but slashed price targets following the earnings miss:
-Benchmark Company maintained its Buy rating but lowered the target to $37 from $43.
-Citigroup kept a Buy and cut the target to $48 from $56.
-Oppenheimer reiterated Outperform, lowering its target to $50 from $55.
-Guggenheim kept a Buy and cut the target to $45 from $55.
-Barclays kept an Overweight rating with a new target of $40, down from $54.
Technical Take
After earnings, the stock traded 2025 lows, a price not seen since late 2023. The stock had a reactionary bounce on the ESPN news, but the stock stalled at the 21-day moving average. DKNG has not gotten about this MA since early September when it was trading over $45.
The stock could finally lift above that level, but due to the fundamental picture illustrated above, any rally should be sold. The 50-day MA is $36.80 and the 200-day MA is $39.30.
Investors should take caution if the recent lows are taken out. There is a 161.8% Fibonacci extension down at $17.50 that could be of interest to short sellers.
In Summary
DraftKings has been in a downtrend all year, and after a disappointing quarter and lowered guidance, that should continue. Revenue growth is slowing, margins are under pressure, and analysts are trimming both earnings estimates and price targets.
While new initiatives like DraftKings Predictions and expanded partnerships offer potential upside, they are unlikely to offset the near-term headwinds. Investors should be cautious, as momentum has turned negative and the risk of further declines outweighs near-term upside.
Additional content:
Can Chipotle's Margins Withstand Cost Inflation Headwinds?
Chipotle Mexican Grill, Inc. is tightening its operational and pricing discipline as restaurant-level margins come under pressure from accelerating cost inflation. In the third quarter of 2025, the company's restaurant-level margins contracted 100 basis points year over year to 24.5%. Management attributed the decline to a mix of rising beef prices, import tariffs and higher labor costs.
Chipotle anticipates continued margin pressure as inflationary trends persist into late 2025 and 2026. The company expects the cost of sales to remain around 30% of revenues in the fourth quarter, reflecting ongoing inflation in beef and chicken, the full-quarter impact of its premium Carne Asada limited-time offering, and roughly 30 basis points of tariff-related headwinds.
Management projects tariffs to have a sustained 50-basis-point impact going forward, excluding items covered under the USMCA exemption for Mexican and Canadian imports. Labor costs rose to 25.2% of sales in the third quarter, up about 30 basis points year over year, as modest wage inflation and softer transaction volumes offset productivity gains. For the fourth quarter, labor expenses are expected to remain in the high-25% range, with wage inflation trending in the low-single-digit range.
While Chipotle's value proposition remains a key differentiator, management has opted not to fully offset inflation through price increases. By deliberately absorbing a portion of rising input costs, the company is prioritizing price stability to reinforce its competitive positioning. Chipotle's decision to maintain a 20-30% pricing discount relative to fast-casual peers reflects a disciplined approach to preserving value perception and customer retention. While this strategy will likely weigh on near-term margins, management views it as a calculated tradeoff to safeguard long-term brand equity and sustain traffic momentum amid a softer consumer spending environment.
Operationally, Chipotle continues to focus on efficiency and consistency as levers to stabilize profitability. The rollout of its high-efficiency equipment package — featuring dual-sided planchas and upgraded prep systems — has shown promising early results, improving throughput, food quality and labor utilization. These initiatives, alongside menu innovation, such as the successful Adobo Ranch and Red Chimichurri launches, are designed to reignite transaction growth in 2026. The company is also refining its digital rewards ecosystem and retraining field teams to improve order accuracy and enhance the in-store experience.
Despite near-term margin pressure, Chipotle highlighted several structural initiatives as longer-term stabilizers. Programs such as the high-efficiency equipment rollout, expanded menu innovation pipeline and digital engagement enhancements are designed to improve operational productivity, offset cost inflation and deepen customer loyalty.
These efforts aim to create an efficient, scalable restaurant model with lower labor intensity and stronger unit economics. While restaurant-level margins remain constrained by rising input costs and sustained inflation, management framed these investments as the groundwork for sustainable, margin-accretive growth in the years ahead.
Shares of Chipotle have plunged 50.6% so far this year compared with the industry's fall of 11.3%. In the same time frame, other industry players like Starbucks Corp. and CAVA Group, Inc. have declined 5.3%, 83.7% and 56.4%, respectively.
CMG YTD Price Performance
From a valuation standpoint, CMG trades at a forward price-to-sales (P/S) multiple of 3.03, below the industry's average of 3.35. Conversely, industry players, such as Starbucks and CAVA, have P/S multiples of 2.52 and 4.12, respectively.
The Zacks Consensus Estimate for CMG's 2026 earnings per share has declined 12% to $1.25 in the past 60 days.
The company is likely to report strong earnings, with projections indicating a 7% rise in 2026. Conversely, industry players like Sweetgreen and CAVA are likely to witness an increase of 24.8% and 11.6%, respectively, year over year, in 2026 earnings. Meanwhile, Starbucks' fiscal 2026 earnings are likely to witness a rise of 16.9%, year over year.
CMG stock currently has a Zacks Rank #5 (Strong Sell).
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Reddit and DraftKings have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – November 13, 2025 – Zacks Equity Research shares Reddit (RDDT - Free Report) as the Bull of the Day and DraftKings (DKNG - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Chipotle Mexican Grill, Inc. (CMG - Free Report) , Starbucks Corp. (SBUX - Free Report) and CAVA Group, Inc. (CAVA - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Reddit is a Zack Rank #1 (Strong Buy) that operates a community-based social media platform organized around "subreddits," which are individual forums dedicated to specific interests, topics, and hobbies. Users post content, vote posts, and comments up or down, and engage in real-time discussions.
Reddit generates revenue mainly from advertising, and recently, from licensing its massive dataset to companies. especially AI firms, for model training and content insights.
The company just delivered an impressive quarter, but investors quickly shifted into profit taking. Shares pulled back right after the earnings release, then fell further during the broader market selloff. However, the stock has since rebounded and returned to the levels seen before earnings.
So now the question is if this stock is ready to take out all-time highs, or if there is a period of consolidation
About the Company
Reddit has quietly evolved from a quirky corner of the internet into one of the most powerful community platforms in the world. But with a unique model built around user-generated content, highly engaged communities, and a fast-growing advertising business, Reddit is now positioning itself as a data and content engine in the era of AI.
After years of operating privately, Reddit's push into monetization, including new partnerships with AI companies and expanding ad formats, is driving momentum.
RDDT is valued at $40 billion and has a forward PE of 88. The stock has Zacks Style Scores of "F" in Value, but "A" in Growth.
Q3 Earnings Beat
Reddit delivered a standout Q3, beating EPS by 51% and showing accelerating operating leverage. The company reported EPS of $0.80 vs. $0.52 expected and revenue of $585M vs. $543M expected. The quarter was fueled by surging advertiser demand and stronger user monetization.
Adjusted EBITDA hit $236M, more than doubling year over year, with margins expanding to 40.3% from 27% a year ago.
Key engagement metrics were equally strong: Daily active users reached 116 million, up 19% year over year, and ARPU climbed to $5.04, reflecting better ad performance and data licensing momentum.
Management guided for an even stronger Q4 with revenue of $655M–$665M (+53–55% y/y) and adjusted EBITDA of $275M–$285M, implying EBITDA growth approaching 80–85% with margins around 42%. Reddit highlighted rapid advertiser adoption, with active advertisers +75% y/y and ad revenue +74% y/y, driven by machine learning improvements, lower-funnel performance tools, and international expansion.
CEO Steve Huffman emphasized Reddit's differentiated platform, saying the site provides "authentic conversations you can't find anywhere else." The company believes it will exit the year with momentum and begin executing on its 2026 strategy focused on user growth, community expansion, traffic diversification, and scaling ad formats.
Estimates Head Higher
Since reporting earnings, analysts have been quick to lift earnings estimates.
For the current quarter, estimates have gone from $0.80 to $0.98 over the last 30 days. For next quarter, we see another big jump, with estimates going to $0.57 from $0.45.
For the current year, estimates have gone from $1.87 to $2.35, a jump of 25%.
The longer-term looks solid as well, with estimates for next year going from $9.16 to $9.55, an increase of 4%.
Analysts continue to raise their expectations following Reddit's strong results. Citigroup reiterated its Buy rating and increased its price target to $265 from $250, while B. Riley Securities also reaffirmed a Buy and lifted its target to $245 from $235. In addition, Bank of America raised its price target to $210 from $180 while maintaining a Neutral stance.
The Technical Take
RDDT exploded after consolidation post-IPO, moving from $50 to $230. However, the stock fell back under $100 earlier this year. The summer months were kind to RDDT investors, with the stock moving back over $200 and making a high of $282.95 back in September.
The stock has pulled back again, but tested a key support level last week in which it responded very positively.
If we draw a Fibonacci retracement from May lows to September highs, we get a 61.8% retracement support level at $166. The low last week for RDDT was $173 and from there it bounced violently to $213.
With the support line clearly drawn, the stock is trading between some moving average and could consolidate around the $200 level. This is a great spot to be building a position with risk at the 61.8% level, which happens to be the 200-day moving average as well
Let us look at those moving averages
21-day: $202
50-day: $220
200-day: $166.50
If the bulls can push price over the 50-day MA and the post-earnings highs, the stock should break out.
In Summary
Reddit is showing the kind of growth story investors look for. The company is scaling revenue at a rapid pace, improving profitability, and attracting analysts who continue to raise estimates and price targets.
Users are expanding, monetization is improving, and Reddit is becoming a key data provider in the artificial intelligence economy.
Technically, the stock is holding an important support level and now sits in a healthy consolidation zone, giving patient investors an attractive setup. With earnings estimates moving higher and momentum returning after profit taking, Reddit looks positioned to challenge its prior highs as we head toward year end.
Bear of the Day:
DraftKings, a Zacks Rank #5 (Strong Sell), is on a cold streak after the stock has fallen over 40% from the summer highs.
Once a favorite among growth investors, the stock is now showing technical weakness with a clear downtrend forming on the chart. Recent results fell short of expectations, prompting analysts to cut earnings estimates and lower price targets.
While user engagement remains steady, rising costs, slowing revenue growth, and narrowing margins have raised concerns about profitability heading into next year.
With momentum turning negative and sentiment softening, DraftKings faces an uphill climb to regain investor confidence. Shares bounced off 2025 lows after the earnings report, but investors might want to cash out now, before the window closes.
About the Company
DraftKings is a digital sports entertainment and gaming company that offers daily fantasy sports, online sports betting, and iGaming products. The company operates a vertically integrated technology platform that allows users to participate in sports wagering and interactive gaming across multiple jurisdictions.
DraftKings has been a leader in the fast-growing U.S. sports betting market, leveraging partnerships with major leagues, teams, and media brands to expand its reach.
However, the company continues to face heavy competition, fluctuating promotional costs, and the challenge of achieving consistent profitability in a crowded and evolving industry.
The company has a market cap over $15B, with a Zacks Style Score of "F" in Value and Momentum.
Q3 Earnings Miss
DraftKings reported a disappointing Q3 8% EPS miss and management slashed its full-year outlook. The company posted an adjusted loss of $0.26 per share vs. $0.24 expected on revenue of $1.14 billion vs. $1.21 billion expected.
Slower growth and rising costs were the culprit, with average monthly unique payers rising just 2%, while revenue per payer increased 3% to $106. Adjusted EBITDA came in at a loss of $126.5 million, more than double the loss from a year ago.
Management cut its FY2025 revenue guidance to $5.9–$6.1 billion and EBITDA to $450–$550 million, down sharply from the prior outlook of $6.2–$6.4 billion in revenue and $800–$900 million in EBITDA.
While leadership emphasized optimism around new initiatives like DraftKings Predictions and expanded partnerships with ESPN and NBCUniversal, the weaker guidance overshadowed those positives.
The company did authorize a $1 billion increase to its share repurchase program, but the earnings miss, margin pressure, and cautious tone have left investors questioning the near-term trajectory for profitability.
Earnings Estimates
Analysts are taking numbers down, and with that price targets are headed lower.
Both the current quarter and next quarter are trending lower over the last 30 days, but the current year has seen a drastic drop over the last 60 days. Numbers for the year have dropped 22%, from $1.45 to $1.13.
Next year gets better, but number have fallen 7% over that same time frame, falling from $2.18 to $2.02.
Several major brokers have reiterated positive ratings on DraftKings but slashed price targets following the earnings miss:
-Benchmark Company maintained its Buy rating but lowered the target to $37 from $43.
-Citigroup kept a Buy and cut the target to $48 from $56.
-Oppenheimer reiterated Outperform, lowering its target to $50 from $55.
-Guggenheim kept a Buy and cut the target to $45 from $55.
-Barclays kept an Overweight rating with a new target of $40, down from $54.
Technical Take
After earnings, the stock traded 2025 lows, a price not seen since late 2023. The stock had a reactionary bounce on the ESPN news, but the stock stalled at the 21-day moving average. DKNG has not gotten about this MA since early September when it was trading over $45.
The stock could finally lift above that level, but due to the fundamental picture illustrated above, any rally should be sold. The 50-day MA is $36.80 and the 200-day MA is $39.30.
Investors should take caution if the recent lows are taken out. There is a 161.8% Fibonacci extension down at $17.50 that could be of interest to short sellers.
In Summary
DraftKings has been in a downtrend all year, and after a disappointing quarter and lowered guidance, that should continue. Revenue growth is slowing, margins are under pressure, and analysts are trimming both earnings estimates and price targets.
While new initiatives like DraftKings Predictions and expanded partnerships offer potential upside, they are unlikely to offset the near-term headwinds. Investors should be cautious, as momentum has turned negative and the risk of further declines outweighs near-term upside.
Additional content:
Can Chipotle's Margins Withstand Cost Inflation Headwinds?
Chipotle Mexican Grill, Inc. is tightening its operational and pricing discipline as restaurant-level margins come under pressure from accelerating cost inflation. In the third quarter of 2025, the company's restaurant-level margins contracted 100 basis points year over year to 24.5%. Management attributed the decline to a mix of rising beef prices, import tariffs and higher labor costs.
Chipotle anticipates continued margin pressure as inflationary trends persist into late 2025 and 2026. The company expects the cost of sales to remain around 30% of revenues in the fourth quarter, reflecting ongoing inflation in beef and chicken, the full-quarter impact of its premium Carne Asada limited-time offering, and roughly 30 basis points of tariff-related headwinds.
Management projects tariffs to have a sustained 50-basis-point impact going forward, excluding items covered under the USMCA exemption for Mexican and Canadian imports. Labor costs rose to 25.2% of sales in the third quarter, up about 30 basis points year over year, as modest wage inflation and softer transaction volumes offset productivity gains. For the fourth quarter, labor expenses are expected to remain in the high-25% range, with wage inflation trending in the low-single-digit range.
While Chipotle's value proposition remains a key differentiator, management has opted not to fully offset inflation through price increases. By deliberately absorbing a portion of rising input costs, the company is prioritizing price stability to reinforce its competitive positioning. Chipotle's decision to maintain a 20-30% pricing discount relative to fast-casual peers reflects a disciplined approach to preserving value perception and customer retention. While this strategy will likely weigh on near-term margins, management views it as a calculated tradeoff to safeguard long-term brand equity and sustain traffic momentum amid a softer consumer spending environment.
Operationally, Chipotle continues to focus on efficiency and consistency as levers to stabilize profitability. The rollout of its high-efficiency equipment package — featuring dual-sided planchas and upgraded prep systems — has shown promising early results, improving throughput, food quality and labor utilization. These initiatives, alongside menu innovation, such as the successful Adobo Ranch and Red Chimichurri launches, are designed to reignite transaction growth in 2026. The company is also refining its digital rewards ecosystem and retraining field teams to improve order accuracy and enhance the in-store experience.
Despite near-term margin pressure, Chipotle highlighted several structural initiatives as longer-term stabilizers. Programs such as the high-efficiency equipment rollout, expanded menu innovation pipeline and digital engagement enhancements are designed to improve operational productivity, offset cost inflation and deepen customer loyalty.
These efforts aim to create an efficient, scalable restaurant model with lower labor intensity and stronger unit economics. While restaurant-level margins remain constrained by rising input costs and sustained inflation, management framed these investments as the groundwork for sustainable, margin-accretive growth in the years ahead.
CMG Stock Price Performance, Valuation & Estimates
Shares of Chipotle have plunged 50.6% so far this year compared with the industry's fall of 11.3%. In the same time frame, other industry players like Starbucks Corp. and CAVA Group, Inc. have declined 5.3%, 83.7% and 56.4%, respectively.
CMG YTD Price Performance
From a valuation standpoint, CMG trades at a forward price-to-sales (P/S) multiple of 3.03, below the industry's average of 3.35. Conversely, industry players, such as Starbucks and CAVA, have P/S multiples of 2.52 and 4.12, respectively.
The Zacks Consensus Estimate for CMG's 2026 earnings per share has declined 12% to $1.25 in the past 60 days.
The company is likely to report strong earnings, with projections indicating a 7% rise in 2026. Conversely, industry players like Sweetgreen and CAVA are likely to witness an increase of 24.8% and 11.6%, respectively, year over year, in 2026 earnings. Meanwhile, Starbucks' fiscal 2026 earnings are likely to witness a rise of 16.9%, year over year.
CMG stock currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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Today you can access their live picks without cost or obligation.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.