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Chipotle Mexican Grill (CMG) Stock Drops Despite Market Gains: Important Facts to Note

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The most recent trading session ended with Chipotle Mexican Grill (CMG - Free Report) standing at $49.65, reflecting a -0.76% shift from the previouse trading day's closing. The stock trailed the S&P 500, which registered a daily gain of 0.64%. Meanwhile, the Dow gained 0.85%, and the Nasdaq, a tech-heavy index, added 0.31%.

Shares of the Mexican food chain have depreciated by 12.35% over the course of the past month, underperforming the Retail-Wholesale sector's loss of 11.57% and the S&P 500's loss of 7.69%.

The investment community will be closely monitoring the performance of Chipotle Mexican Grill in its forthcoming earnings report. In that report, analysts expect Chipotle Mexican Grill to post earnings of $0.29 per share. This would mark year-over-year growth of 7.41%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.97 billion, up 9.89% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $1.29 per share and revenue of $12.62 billion, which would represent changes of +15.18% and +11.52%, respectively, from the prior year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Chipotle Mexican Grill. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 0.05% lower. Chipotle Mexican Grill is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Chipotle Mexican Grill's current valuation metrics, including its Forward P/E ratio of 38.93. This denotes a premium relative to the industry's average Forward P/E of 22.82.

We can also see that CMG currently has a PEG ratio of 1.93. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Retail - Restaurants was holding an average PEG ratio of 2.07 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 127, finds itself in the top 50% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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