{"id":1118700,"date":"2025-08-15T11:07:27","date_gmt":"2025-08-15T08:07:27","guid":{"rendered":"https:\/\/www.etoro.com\/?p=1118700"},"modified":"2026-03-20T19:34:52","modified_gmt":"2026-03-20T17:34:52","slug":"deep-dive-no-guac-for-chipotle","status":"publish","type":"post","link":"https:\/\/www.etoro.com\/en-us\/news-and-analysis\/market-insights\/deep-dives\/deep-dive-no-guac-for-chipotle\/","title":{"rendered":"Deep Dive: No Guac for Chipotle?"},"content":{"rendered":"

The Daily Breakdown takes a scoop into Chipotle, examining what’s going wrong with the stock. Is the decline enough to entice investors?<\/p>\n

Before we dive in, let\u2019s make sure you\u2019re set to receive The Daily Breakdown each morning. <\/span><\/i>To keep getting our daily insights<\/i><\/b>, all you need to do is <\/span><\/i>log in<\/span><\/i><\/a> to your eToro account.<\/span><\/i><\/p>\n

Deep Dive<\/span><\/h2>\n

Most of us are familiar with Chipotle<\/a>, the company that\u2019s famous for its bowl and burrito offerings. This fast-casual juggernaut commanded a market cap of almost $100 billion at its all-time high from 2024, but has struggled since, with shares down nearly 40% from the peak and into an <\/span>interesting technical area<\/span><\/a>.\u00a0<\/span><\/p>\n

It didn\u2019t help that former CEO Brian Niccol \u2014 the one who helped lead a massive turnaround at the firm \u2014 left last year and went to Starbucks<\/a>. From that perspective, some investors have likely lost faith in management\u2019s ability to properly steer the Chipotle ship.\u00a0<\/span><\/p>\n

The Business<\/b><\/h4>\n

When we look at the business, we can see that revenue, net income, and free cash flow have been steadily growing over the years. When we look at expectations for 2025, analysts expect revenue to rise 7.5% and earnings to grow 8.5%. Further, they expect both figures to accelerate to double-digit growth in 2026 and 2027, with earnings growth outpacing revenue growth (which would be good for margins).\u00a0<\/span><\/p>\n

\"Chipotle's<\/p>\n

The risk: <\/b>While analysts\u2019 estimates could be spot-on accurate \u2014 or even too conservative \u2014 one risk is that the estimates are too <\/span>optimistic<\/span><\/i>. If that\u2019s the case, Chipotle may not grow as fast as investors currently expect and that could inflict further pain on its share price.\u00a0<\/span><\/p>\n

Another risk? The consumer. In the company\u2019s last conference call, CEO Scott Boatwright said:\u00a0<\/span><\/p>\n

\u201cI think much of what we’re experiencing right now is due to macro and the low-income consumer is looking for value as a price point. At present you have to look no further than what’s going on with our competitors with snack occasion or $5 meals, and that’s where the consumer is drifting towards, [with] value as a price point because of low consumer sentiment.\u201d\u00a0<\/span><\/p>\n

However, he added:\u00a0<\/span><\/p>\n

\u201cWe did see some share loss in the April-May time frame as the low-income consumer pulled back, but we’re back to share gains yet again in June-July.\u201d<\/span><\/p>\n

Want to receive these insights straight to your inbox?<\/strong><\/p>\n

Sign up here<\/a><\/p>\n

Diving Deeper<\/span><\/h2>\n

For what it\u2019s worth, <\/span>analysts\u2019 consensus price target<\/span><\/a> calls for roughly 38% upside in the stock. With expectations still calling for growth, we\u2019ve seen Chipotle\u2019s valuation fall as the share price has moved lower.\u00a0<\/span><\/p>\n

\"CMG's<\/p>\n

The stock now trades with its lowest <\/span>forward P\/E ratio<\/span><\/a> in more than two years.\u00a0<\/span><\/p>\n

Bulls may decide that a ~40% decline in the stock price, solid forward growth, and a multi-year low in its forward valuation is enough to warrant a long-term position. Other investors might argue that Chipotle could be prone to a further slowdown in its business or that its valuation is too rich \u2014 even if there isn\u2019t a further slowdown from here.\u00a0<\/span><\/p>\n

Either way, the stock\u2019s decline has now brought forward an interesting debate among investors. <\/span><\/p>\n

Disclaimer:<\/i><\/b><\/p>\n

Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.<\/i><\/b><\/p>\n","protected":false},"excerpt":{"rendered":"

The Daily Breakdown takes a scoop into Chipotle, examining what’s going wrong with the stock. Is the decline enough to entice investors? Before we dive in, let\u2019s make sure you\u2019re set to receive The Daily Breakdown each morning. To keep getting our daily insights, all you need to do is log in to your eToro…<\/p>\n","protected":false},"author":130,"featured_media":1245682,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[6819],"tags":[],"asset_type":[],"class_list":["post-1118700","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-deep-dives"],"acf":[],"yoast_head":"The Daily Breakdown: No Guac for Chipotle?<\/title>\n<meta name=\"description\" content=\"The Daily Breakdown takes a scoop into Chipotle, examining what's going wrong with the stock. 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