Is Chipotle Stock Finally Cheap Enough to Bite?

After years of sizzling performance, Chipotle Mexican Grill is suddenly tasting some humble pie. The once-unstoppable restaurant stock shaved almost a quarter off its share price in just a few days, following an earnings report that showed its growth momentum cooling faster than investors expected.

At first glance, the results weren’t catastrophic, revenue still rose, earnings ticked up, but for a company priced for perfection, “good” isn’t good enough. Let’s dig into what really caused the sell-off.

Key Points

• Comparable sales and margins weakened, and 2025 guidance points to further softness.

• Investors are repricing CMG’s once lofty multiples amid slower growth.

• High profitability, buybacks, and new store openings support long-term recovery potential.

What Really Went Wrong in Chipotle’s Earnings

Chipotle’s third-quarter numbers tell a story of a business still expanding, but at a much slower pace. Revenue climbed to $3.0 billion, but comparable-store sales inched up just 0.3%, a huge slowdown from last year’s 6% growth.

Even more telling, management’s guidance implies comps could slip into slightly negative territory, signaling that the brand’s pricing power and customer traffic might be losing steam.

Margins also narrowed. Restaurant-level operating margin fell to 24.5%, while overall operating margin declined by a full percentage point to 15.9%.

What’s striking is that CMG stock was already under pressure before these results hit the tape. That tells us institutions were bracing for disappointment, and when the mild miss arrived, the reaction snowballed.

The Valuation Hangover That No One Talks About

Chipotle’s real issue isn’t just slowing growth, it’s that the stock had been priced as if double-digit expansion would last forever. For years, CMG traded north of 40x earnings, peaking at multiples near 60 during the pandemic-era restaurant boom.

When a high-multiple stock even flirts with decelerating growth, analysts’ repricing can be brutal. A one-point drop in operating margin or a soft traffic number can erase billions in market cap overnight.

Yet despite the carnage, analysts still see upside. The consensus price target sits around $45, roughly two fifths above where the stock currently trades.

What the Market Might Be Missing

There’s a silver lining buried in the disappointment. Chipotle’s profitability remains stellar: over the last 12 months, it’s maintained a 13% net margin. That efficiency gives Chipotle immense flexibility to weather downturns and reinvest in growth.

And management seems to know it. The company repurchased almost $700 million in stock during Q3 at an average price above $42 per share.

Then there’s new stores. Chipotle opened 84 new restaurants in Q3 and still plans over 350 more next year. Roughly half will include “Chipotlanes,” drive-through digital pickup windows that generate higher margins and stronger throughput. These new units, not same-store growth, will likely anchor revenue gains for the next several years.

Temporary Pain, Long-Term Opportunity?

Chipotle’s short-term stumble looks dramatic, but the underlying business remains durable. It’s a proven brand with a loyal customer base, strong balance sheet, and one of the most admired operating models in the restaurant industry.

The macro environment, inflation, slower wage growth, weaker consumer sentiment, is cyclical. Chipotle’s competitive advantages, from its digital ecosystem to its supply-chain discipline, are structural.

At around 28 times earnings, CMG isn’t “cheap” by traditional measures, but it’s the cheapest it’s been in years. For long-term investors willing to stomach volatility, this could be the moment to start nibbling while sentiment is sour.

Chipotle has faced food-safety crises, cost surges, and recessions before, and every time, it’s come back stronger. History may not repeat perfectly, but for this burrito giant, it tends to rhyme.