Chipotle Mexican Grill (CMG), the popular American fast-casual restaurant chain best known for its made-to-order burritos, bowls, tacos and other Mexican-inspired foods, introduced new protein-rich items on December 23, along with a restaurant-only snack offering. The initiative responds to strong consumer demand for convenient, protein-rich meals and snacks, influenced by broader health trends (such as a focus on macronutrients and GLP-1 food preferences).
The protein-rich menu includes servings such as the Double High Protein Bowl (81g protein), High Protein Low Calorie Salad (36g protein), and Chicken Adobo Taco (15g protein), among others. Meanwhile, Chipotle’s first-ever snack offering is a High-Protein Cup, which contains a 4-ounce serving of fresh, grilled, hand-cut Adobo Chicken (32g protein, ~180 calories) priced around $3.50 to $3.82 depending on location.
Founded in 1993 and headquartered in California, Chipotle operates more than 4,000 restaurants in the United States and abroad, with a presence in Canada, the United Kingdom, France, Germany, Kuwait, the United Arab Emirates and other countries. Chipotle emphasizes fresh ingredients, simple preparation and customizable orders, often made visible to customers.
Valued at a market cap of $49.8 billion, CMG stock is down 37.1% on a year-to-date basis. In fact, since former CEO Brian Nicol, often credited with structurally overhauling the struggling restaurant chain, left the company in August 2024, CMG stock is down 32.4%. Needless to say, the company’s former COO and current CEO, Scott Boatwright, has a big job ahead of him.
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However, with the introduction of new menus and a focus on health-conscious consumers, CMG stock could start to sizzle again.
Chipotle’s financials are bland, a stark contrast to its offerings, which are exciting and full of flavor. Over the past 10 years, Chipotle’s revenue and profits have grown at compound annual growth rates (CAGR) of 9.93% and 11.25%, respectively, which is decent but nothing to drool over.
The most recent quarter’s results also paint a similar picture. Revenue for the third quarter ended September 30, 2025 was $3 billion. This represents annual growth of 7.5%, with core revenues from the food and beverage sector increasing 7.6% over the same period to $2.99 billion. However, the fact that comparable restaurant sales remained stable was concerning as inflationary pressures continued to weigh on consumers’ discretionary spending. As a result, the number of permanent closures in the September quarter increased to 4, compared to just 1 last year. So, Chipotle reported that for 2025, full-year comparable restaurant sales would decline in the low single-digit range.
This, combined with increased operating expenses, caused the company’s earnings to decline to $0.29 per share from $0.28 per share a year earlier. This is notably in line with the consensus estimate, with the company having reported no revenue shortfall for over two years now.
Meanwhile, operating cash flow also remained strong in the first nine months of 2025. Net cash flow from operating activities in the first nine months of the year was $1.69 billion, higher than the previous year’s figure of $1.58 billion. Overall, the company ended the quarter with a cash balance of $698.7 million, exceeding its short-term debt by approximately $293 million.
However, even after such subdued stock performance for over a year now, CMG continues to trade at levels well above the industry average. Its forward P/E, P/S, and P/CF of 32.53x, 4.18x, and 24.59x are all above the industry medians of 17.78x, 0.96x, and 12x, respectively.
Chipotle is counting on international markets to offset slowing U.S. sales, although executives remain firm in its core market, saying there is still room to double the number of domestic stores to about 7,000 stores one day. The 2026 plan calls for 350 to 370 new openings, which represents about 9% more locations overall.
Meanwhile, early international bets are paying off so far. Franchises in the Middle East and company-operated stores in Canada are seeing good customer engagement, showing the brand can expand into new territories. South Korea and Singapore will follow in 2026, and other markets will likely follow. This type of constant push abroad should really strengthen growth prospects.
At home, Chipotle is trying several things to get back on firmer footing. Starting next year, limited-time items will be rolled out three or four times with a wider range of sauces, dips and sides to attract new customers and encourage people to order more often. The loyalty app and setup are also being reworked to better connect with a younger audience. Finally, catering and group orders, areas that are little exploited, are also receiving increased attention. Add in continued store additions here and abroad, and these steps should keep sales rising over time.
When it comes to margins, a few projects stand out as ways to improve long-term profitability. The main one is the High Efficiency Equipment Package (HEAP), already in place at around 175 sites. It enables more stable meal preparation, happier guests and better staffing during peak periods, with overall volume management increasing. The double-sided grill that cuts protein cooking time in half is the big win, eliminating jams in the kitchen and allowing stores to handle busy times without chaos. As HEAP is rolled out chain-wide over the coming years, labor efficiencies are expected to expand and increase margins.
Faster service and consistent quality when business is highest should also build customer loyalty, adding further momentum to revenue.
Taking all of this into account, analysts have given the stock an overall rating of “Moderate Buy”, with an average price target of $44.39. This indicates approximately 19% upside potential from current levels. Out of 33 analysts covering the stock, 21 have a “Strong Buy” rating, three have a “Moderate Buy” rating, eight have a “Hold” rating and one has a “Strong Sell” rating.
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As of the date of publication, Pathikrit Bose did not hold (either directly or indirectly) any positions in any of the securities mentioned in this article. All information and data contained in this article are for informational purposes only. This article was originally published on Barchart.com
