Think It's Too Late to Buy Chipotle Stock? Here's the Biggest Reason Why There's Still Time.

Chipotle Mexican Grill (NYSE: CMG) has been an unbelievable market-beater since its IPO in 2006.

As you can see from the chart below, the stock is up more than 5,000%, turning $1,000 into $50,000 during that time.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

CMG data by YCharts

Chipotle pioneered the fast-casual concept, and it's been executed to near perfection, with the exception of a few years when its performance was marred by the E. coli scandal.

Today, Chipotle stock remains expensive at a price-to-earnings ratio of 46, which may be scaring some investors, but the stock can continue to outperform the market.

Image source: Chipotle.

Same-store sales will keep growing

Same-store sales are the bread and butter of any restaurant chain, and Chipotle has consistently grown comparable sales throughout its history. Doing so allows it to grow revenue without opening new stores, and it increases margins since that added revenue is coming without the need for new real estate and additional rent.

Comparable sales jumped 7.4% in 2024, and with digital, delivery, and drive-thru available, the revenue ceiling is high for an individual Chipotle restaurant. The company is no longer constrained by throughput. It can serve customers in myriad ways and can fill those orders as long as the kitchen staff is sufficient.

In addition to growing individual transactions, the company can also increase same-store sales through price increases, and it has shown several times before that it has pricing power.

Its restaurant opening target will increase

Chipotle is currently targeting 7,000 restaurants in North America, about double the 3,726 it finished the year with.

That might make it seem like the company has limited room for growth, but it will almost certainly raise that target as it grows, especially as recent innovations like the Chipotlane (drive-thru) mean it can profitably operate stores in areas such as an interstate exit, where it might not have made sense earlier.

There are more than 14,000 McDonald's in the U.S., and Chipotle's average unit volumes are similar to McDonald's. Expect the burrito chain to open 10,000 or more locations over the long term, driving the stock higher.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $311,551!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,990!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $519,375!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of February 28, 2025

Jeremy Bowman has positions in Chipotle Mexican Grill. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool recommends the following options: short March 2025 $58 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.