2024-08-05 20:07:00 ET
Investors were all over Chipotle (NYSE: CMG) before its huge 50-to-1 stock split earlier this year. Right before the split, Chipotle shares were up 40% year to date (YTD) and crushing the S&P 500 index. Now, with the hype around the split fading and weak guidance in its second-quarter earnings report, shares of the stock have fallen around 25% from all-time highs set in June.
Chipotle is a fast-growing restaurant chain with a loyal customer base, but it still trades at an expensive-looking valuation. Is the stock-split stock a buy after its 25% drawdown? Let's find out.
In Q2 2024, Chipotle put up more strong results. Revenue grew 18% year over year to $3 billion. This was driven by new store openings and strong comparable sales growth -- measuring growth at existing locations -- of 11.1%. Restaurant-level margins improved to 28.9%, which shows the operating leverage Chipotle is achieving as it scales its fast-casual Mexican concept.
For further details see:
Chipotle Stock Has Fallen 25%: Should You Buy the Stock After Its Historic Stock Split?