CMG - This Restaurant Stock Could Be Poised for a Chipotle-Like Breakout
Chipotle Mexican Grill (NYSE: CMG) shares have cooled off a bit since the fast-casual chain's third-quarter earnings report, but the stock has still nearly tripled since February 2018.
The surprising comeback came under new CEO Brian Niccol, who capitalized on digital ordering through the Chipotle app and website, and third-party delivery through apps like Doordash, to deliver a boom in sales. In the most recent quarter, comparable sales jumped 11%, driving adjusted earnings per share up 78%. Those kinds of results have made investors forget about the E. coli scandal that sunk the stock a few years ago, and they have pushed the stock up past its former heights, indicating they're more optimistic about the company than ever.
However, with the stock trading at a price-to-earnings ratio close to 60, Chipotle's recent rally may be exhausted, but the company has left a clear blueprint for other restaurant chains to follow. Keep reading to learn about one undervalued restaurant stock that could be set to follow in Chipotle's footsteps.