Back to top

Image: Bigstock

Chipotle Mexican Grill (CMG) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

In the latest trading session, Chipotle Mexican Grill (CMG - Free Report) closed at $662.18, marking a +0.33% move from the previous day. This move lagged the S&P 500's daily gain of 2.14%. At the same time, the Dow added 2.06%, and the tech-heavy Nasdaq gained 2.65%.

Coming into today, shares of the Mexican food chain had lost 10.47% in the past month. In that same time, the Retail-Wholesale sector lost 10.41%, while the S&P 500 lost 6.63%.

CMG will be looking to display strength as it nears its next earnings release. In that report, analysts expect CMG to post earnings of $3.70 per share. This would mark year-over-year growth of 28.92%. Meanwhile, our latest consensus estimate is calling for revenue of $1.40 billion, up 10.54% from the prior-year quarter.

CMG's full-year Zacks Consensus Estimates are calling for earnings of $13 per share and revenue of $5.41 billion. These results would represent year-over-year changes of +43.49% and +11.2%, respectively.

Investors might also notice recent changes to analyst estimates for CMG. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.04% higher. CMG is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, CMG is currently trading at a Forward P/E ratio of 49.37. For comparison, its industry has an average Forward P/E of 21.51, which means CMG is trading at a premium to the group.

Investors should also note that CMG has a PEG ratio of 2.57 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Restaurants industry currently had an average PEG ratio of 2.06 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 146, which puts it in the bottom 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow CMG in the coming trading sessions, be sure to utilize

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Chipotle Mexican Grill, Inc. (CMG) - free report >>

Published in