CMG - Chipotle Mexican Grill: A Fantastic Company At A Bad Price

2024-06-20 11:51:00 ET

Summary

• Chipotle Mexican Grill is a high-quality restaurant operator with impressive revenue, profit, and cash flow growth.
• The company benefited from the pandemic, increasing prices and expanding margins, leading to significant bottom line expansion.
• Chipotle continues to expand its physical footprint and innovate sales strategies, but shares are expensive, making it a 'hold' for now.

I would venture to say that, purely from a business perspective, Chipotle Mexican Grill ( CMG ) is the highest quality restaurant operator on the planet. Or at least it's the highest quality publicly traded one. The company has demonstrated time and time again the ability to grow revenue, profits, and cash flows, all at a rapid pace. Even though consumers are finally pushing back against price increases at other chains, all of the evidence suggests that they still have no problem paying the price here. The company achieved comparable restaurant sales growth even during the pandemic, and it actually benefited from the pandemic in a way that most other companies did not....

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