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Examining Chipotle Mexican Grill, Inc.'s (NYSE:CMG) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess CMG's latest performance announced on 31 December 2018 and compare these figures to its longer term trend and industry movements.
How Did CMG's Recent Performance Stack Up Against Its Past?
CMG's trailing twelve-month earnings (from 31 December 2018) of US$177m has increased by 0.2% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -25%, indicating the rate at which CMG is growing has accelerated. What's the driver of this growth? Well, let’s take a look at if it is merely owing to industry tailwinds, or if Chipotle Mexican Grill has seen some company-specific growth.
In terms of returns from investment, Chipotle Mexican Grill has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. However, its return on assets (ROA) of 7.3% exceeds the US Hospitality industry of 7.0%, indicating Chipotle Mexican Grill has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Chipotle Mexican Grill’s debt level, has declined over the past 3 years from 32% to 20%.
What does this mean?
Chipotle Mexican Grill's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. There could be factors that are influencing the entire industry thus the high industry growth rate over the same period of time. I suggest you continue to research Chipotle Mexican Grill to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CMG’s future growth? Take a look at our free research report of analyst consensus for CMG’s outlook.
- Financial Health: Are CMG’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.