CMG has grown over 30% year-to-date
Chipotle Mexican Grill, Inc. (NYSE:CMG) is an American chain of fast casual restaurants that specializes in tacos and burritos that are made to order in front of the customer. CMG has nearly 2,900 restaurants in the United States, Canada, United Kingdom, France, and Germany.
With a market capitalization of $51.75 billion and nearly 95,000 employees, Chipotle is also one of the biggest players in the food industry. On November 4, the restaurant company announced that it has set science-based targets with the Science Based Targets initiative (SBTi) to reduce greenhouse gas emissions by 50% by 2030 from a 2019 base year.
On the charts, Chipotle stock saw a slight pullback following its surge to a record high of $1,958.54 on Sept. 23, though this negative price action was captured by the $1,760 mark, with the 100-day moving average guiding the security higher as well. CMG is up 32.3% year-to-date, and 45.5% year-over-year.
From a fundamental point of view, Chipotle stock’s valuation is undoubtedly on the richer side given its top- and bottom-line growth rate. Although the restaurant brand has increased its revenues and net income by 60% and 300%, respectively, since fiscal 2017, the equity is trading at an inflated price-earnings ratio of 73.88. In addition, CMG has a forward price-earnings ratio of 54.05, which signals a big, expected increase in earnings but is still a high valuation. Overall, Chipotle stock will likely continue to expand well into the future. However, investors may be better suited waiting for a better entry point, considering Chipotle stock is still hovering near its all-time highs.
All this being said, however, options might be the way to go. The security's Schaeffer's Volatility Index (SVI) of 26% stand higher than just 26% of readings from the past 12 months. This suggests options traders are pricing in relatively low volatility expectations at the moment.