If You Invested $1000 in Chipotle Mexican Grill 10 Years Ago, This Is How Much You'd Have Now
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Chipotle Mexican Grill (CMG) ten years ago? It may not have been easy to hold on to CMG for all that time, but if you did, how much would your investment be worth today?
Chipotle Mexican Grill's Business In-Depth
With that in mind, let's take a look at Chipotle Mexican Grill's main business drivers.
A Delaware corporation, Chipotle Mexican Grill, together with its subsidiaries operates quick-casual and fresh Mexican food restaurant chains. The company was founded in 1993 by Steve Ells who started with a single restaurant in Denver, CO. The company offers a focused menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. Chipotle restaurants feature free-range, hormone-free pork, natural chicken and other meat products cooked through traditional methods and served in a unique atmosphere. Chipotle classifies its restaurants as end-caps (at the end of a line of retail chains), in-lines (in a line of retail chains), free-standing units and others.
Chipotle, being one of the most recognized fast-casual Mexican restaurant chains in the United States, had a good share of negative publicity throughout 2016 due to an issue of food-borne illnesses that surfaced toward 2015-end. As a safety measure, the company was forced to close several outlets. In order to chalk out a viable business strategy, Chipotle discarded its former co-CEO model and appointed former Yum! Brands' executive Brian Niccol as the CEO.
The company is committed to using high-quality real ingredients, classic cooking techniques and distinctive interior design to serve customers. As of Dec 31, 2022, the company owned and operated about 3,187 restaurants across the United States, Canada, the U.K., France and Germany.
Chipotle’s marketing strategy shifted from a promotion driven decentralized approach in 2017 to a more central model designed to generate higher consumer awareness and attract guests. The company utilizes e multiple marketing channels, including national television, digital marketing, social media, fundraising, events and sponsorships to reach consumers. Delivery services are mostly made by third party service providers.
In 2018, Chipotle launched a loyalty program called Chipotle Rewards, which provides customers with the opportunity to earn bonus points or free food. Earned rewards generally expire one to six months after they are issued, and points generally expire if an account is inactive for a period of six months.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Chipotle Mexican Grill a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in May 2013 would be worth $5,586.60, or a 458.66% gain, as of May 19, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 151.76% and the price of gold went up 38.74% over the same time frame.
Analysts are anticipating more upside for CMG.
Shares of Chipotle have outperformed the industry in the past year. The company reported impressive first-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The company benefits from its strong comparable restaurant sales growth, digital efforts, Chipotlane add-ons and menu innovation. This and strength in digital sales, rise in menu prices, new restaurant openings and higher restaurant-level operating margin have been driving the company’s performance. It reported solid benefits from Project Square One with improvements, including throughput on the frontline, on-time and accuracy on the digital make line. Moving ahead, the company emphasizes on testing changes to the smarter pickup times logic to boost growth.
Over the past four weeks, shares have rallied 16.54%, and there have been 13 higher earnings estimate revisions in the past two months for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
