Chipotle Mexican Grill Inc (NYSE: CMG)

Sector: Consumer Cyclical Industry: Restaurants CIK: 0001058090
Market Cap 50.94 Bn
P/B 15.81
P/E 33.15
P/S 4.32
ROIC (Qtr) 17.99
Div Yield % 0.00
Rev 1y % (Qtr) 7.51
Total Debt (Qtr) 4.98 Bn
Debt/Equity (Qtr) 1.55

About

Chipotle Mexican Grill, Inc., recognized in the stock market as CMG, operates in the fast-casual restaurant industry. With a mission to cultivate a better world, Chipotle has established itself as a company dedicated to serving responsibly sourced, classically cooked, and real food with wholesome ingredients. The company boasts a vast network of over 3,400 restaurants spread across the United States and internationally. Chipotle's primary business activities revolve around the operation of fast-casual restaurants. The company's core offerings include...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 2.21B provides robust 0.44x coverage of total debt 4.98B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 729.64M provide 2.49x coverage of short-term debt 293.03M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 2.21B provides strong 15.84x coverage of stock compensation 139.79M, indicating sustainable incentive practices.
  • Robust free cash flow of 1.59B exceeds capital expenditure of 621.65M by 2.56x, indicating strong organic growth funding capability.
  • Strong operating cash flow of 2.21B provides 3.24x coverage of SG&A expenses 682.89M, showing efficient operational cost management.

Bear case

  • Operating cash flow of 2.21B barely covers its investment activities of (143.37M), with a coverage ratio of -15.45, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • High receivables of 95.84M relative to inventory of 46.44M (2.06 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Short-term investments of 722.53M represent 1.16x of working capital 623.72M, suggesting potentially excessive financial asset allocation versus operational needs.
  • Retained earnings of 1.04B provide limited buffer against comprehensive income items of (7.93M), which is -131.04x, indicating elevated exposure to market risks.
  • Operating cash flow of 2.21B is outpaced by equity issuance of (2.02B) (-1.10 ratio), indicating concerning reliance on equity markets for funding operations.

Peer comparison

Companies in the Restaurants
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MCD Mcdonalds Corp 222.05 Bn 26.39 8.45 55.82 Bn
2 SBUX Starbucks Corp 95.51 Bn 51.45 2.57 26.61 Bn
3 CMG Chipotle Mexican Grill Inc 50.94 Bn 33.15 4.32 4.98 Bn
4 YUM Yum Brands Inc 43.17 Bn 29.83 5.36 11.55 Bn
5 QSR Restaurant Brands International Inc. 22.43 Bn 24.33 2.42 15.64 Bn
6 DRI Darden Restaurants Inc 21.91 Bn 19.91 1.77 6.16 Bn
7 YUMC Yum China Holdings, Inc. 18.12 Bn 20.05 1.57 1.84 Bn
8 DPZ Dominos Pizza Inc 14.57 Bn 24.72 3.01 5.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 5.91 2.05
EV to Cash from Ops. EV/CFO 24.76 16.57
EV to Debt EV to Debt 11.01 4.75
EV to EBIT EV/EBIT 27.22 3.45
EV to EBITDA EV/EBITDA 24.01 9.76
EV to Free Cash Flow [EV/FCF] EV/FCF 34.42 29.06
EV to Market Cap EV to Market Cap 1.08 6.55
EV to Revenue EV/Rev 4.65 2.40
Price to Book Value [P/B] P/B 15.81 -1.40
Price to Earnings [P/E] P/E 33.15 13.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -9.56
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 18.72
Dividend per Basic Share Div per Share (Qtr) 0.00 0.84
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 30.41
Interest Coverage Int. cover (Qtr) 0.00 -86.85
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -4.89 -24.56
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 0.43 35.50
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.72
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 3.51 -564.81
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 3.77 25.78
EBIT Growth (1y) % EBIT 1y % (Qtr) 3.15 -507.68
EBT Growth (1y) % EBT 1y % (Qtr) 3.15 -41.98
EPS Growth (1y) % EPS 1y % (Qtr) 6.54 -126.51
FCF Growth (1y) % FCF 1y % (Qtr) 27.34 5,724.78
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.71 23.70
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.27 0.99
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 0.63 0.78
Current Ratio Curr Ratio (Qtr) 1.54 1.47
Debt to Equity Ratio Debt/Equity (Qtr) 1.55 0.05
Interest Cover Ratio Int Coverage (Qtr) 0.00 -86.85
Times Interest Earned Times Interest Earned (Qtr) 0.00 -86.85
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 20.10 7.71
EBIT Margin % EBIT Margin % (Qtr) 17.09 -2.27
EBT Margin % EBT Margin % (Qtr) 17.09 -1.97
Gross Margin % Gross Margin % (Qtr) 25.70 34.04
Net Profit Margin % Net Margin % (Qtr) 13.00 -3.69