CMG - Embedded Expectations Analysis - 2019 08 12
Chipotle Mexican Grill inc, (CMG:USA) currently trades at the high end of historical levels relative to UAFRS-based (Uniform) Earnings with a 54.8x Uniform P/E, implying bullish expectations for the firm. However, management is concerned about their forecast, future growth, and Chipotle RewardsValens' qualitative analysis of the firm's Q2 2019 earnings call highlights that management generated excitement when discussing the company's recent strong performance, and when talking about their strength in digital ordering
However, management may be overstating how the last quarter's performance is representative of future trends. Specifically, CMG's management appear concerned about growth. Management highlighted the difficulty of executing on past strategic growth initiatives. Finally, management may be concerned with the company's reward program initiative increasing profitability
Chipotle Mexican Grill together with its subsidiaries operates Chipotle Mexican Grill restaurants, which feature a menu of burritos, burrito bowls (a burrito without the tortilla), tacos, and salads. The company operates Chipotle restaurants throughout the United States, international Chipotle restaurants, and non-Chipotle restaurants. The company uses various herbs, spices and seasonings to prepare its meats and vegetables. The company also serves tortilla chips that seasoned with lime juice and salt, with sides of hand mashed guacamole, salsas, or queso. In addition to sodas, fruit and tea drinks, and organic milk, most of the company's restaurants also provide a selection of beer and margaritas.
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