If You Had Bought Chipotle Mexican Grill Shares A Year Ago You’d Have Made 91%
If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. For example, the Chipotle Mexican Grill, Inc. (NYSE:CMG) share price is up 91% in the last year, clearly besting than the market return of around 3.3% (not including dividends). That’s a solid performance by our standards! However, the stock hasn’t done so well in the longer term, with the stock only up 15% in three years.
See our latest analysis for Chipotle Mexican Grill
To quote Buffett, ‘Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace…’ One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).
Chipotle Mexican Grill was able to grow EPS by 2.6% in the last twelve months. This EPS growth is significantly lower than the 91% increase in the share price. So it’s fair to assume the market has a higher opinion of the business than it a year ago. The fairly generous P/E ratio of 96.39 also points to this optimism.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It might be well worthwhile taking a look at our free report on Chipotle Mexican Grill’s earnings, revenue and cash flow.
A Different Perspective
It’s nice to see that Chipotle Mexican Grill shareholders have received a total shareholder return of 91% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 0.8% per year), it would seem that the stock’s performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Before deciding if you like the current share price, check how Chipotle Mexican Grill scores on these 3 valuation metrics.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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 editorial-team@simplywallst.com. 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.
