Key Takeaways:
- Strategy Reset: Chipotle Mexican Grill launched its “Recipe for Growth” plan after 2025 revenue rose to $12 billion on 334 new openings.
- Execution Investments: Chipotle Mexican Grill guided 350 to 370 new restaurants in 2026 while scaling Chipotlanes to 80% of openings and rolling out high-efficiency equipment toward 2,000 stores by year-end.
- Price Projection: With 10% revenue growth, 16% operating margins, and a 35x exit P/E, Chipotle Mexican Grill stock could reach $62 by December 2028.
- Upside Math: Chipotle Mexican Grill’s $62 value implies 56% upside from the current $40 price, equating to a 17% annualized return over 3 years.
Chipotle Mexican Grill (CMG) runs a fast-casual restaurant chain centered on customizable Mexican-inspired food, with revenue reaching nearly $12 billion in 2025 from company-owned locations serving millions of customers annually.
Chipotle targets value-oriented consumers seeking speed and quality, a positioning that supported revenue growth from $8 billion in 2022 to almost $10 billion in 2023 as traffic and pricing both contributed meaningfully.
Financially, gross profit rose to about $5 billion in 2025 with gross margins holding near 40%, while operating expenses increased to roughly $3 billion, allowing operating income to climb to approximately $2 billion.
Chipotle stock’s operating margins expanded from about 11% in 2021 to roughly 17% by 2024 and remained close to that level in 2025, highlighting efficiency gains as the restaurant base scaled toward several thousand units.
Management continues to emphasize disciplined expansion, with CEO Brian Niccol stating, “We remain committed to reaching 7,000 restaurants in North America over time.”
Furthermore, Chipotle added a high-visibility brand activation in February 2026 as it replaced a traditional game-day commercial with a $1 million free-entrée drop and exclusive app-only Nacho Hacks.
Meanwhile, Chipotle expanded app-exclusive offerings and high-traffic digital promotions, which supported EBITDA above $2 billion in 2025 and normalized net income near $2 billion even as year-over-year growth slowed.
At roughly $40 per share, the valuation assigns a premium to operating margins near 16% compared with peer levels around 10%, and investor debate centers on whether about $2 billion in operating income sustains higher multiples as revenue growth moderates.
What the Model Says for CMG Stock
Chipotle’s scaled restaurant base, asset-light ownership model, and sustained margin discipline elevate expectations, as the business pairs mid-teens operating margins with predictable unit expansion even as annual store growth moderates.
The model assumes 10.4% revenue growth, 15.8% margins, and a 34.5x exit multiple, producing a $61.62 target.
That outcome implies 55.6% total upside and a 16.5% annualized return, which exceeds standard equity opportunity costs.
The model signals a Buy, as modeled returns exceed equity hurdle rates and favor capital appreciation.
With a modeled 16.5% annualized return above a typical 10% equity hurdle, the valuation supports capital appreciation, as expected returns compensate for business and multiple risk, justifying a Buy under disciplined capital allocation.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for Chipotle stock:
1. Revenue Growth: 10.4%
Chipotle stock delivered revenue growth of 14.8% over the past 5 years and 5.4% over the last year as store expansion and pricing offset a maturing restaurant footprint.
Current performance supports a 10.4% growth assumption as unit openings, digital ordering, and menu pricing sustain revenue above $11 billion entering the forecast period.
This outcome requires steady traffic and disciplined pricing, while weaker consumer demand or execution shortfalls pressure revenue growth quickly given the brand’s large revenue base.
This sits above the 1-year revenue growth of 5.4%, because new store additions and digital mix extend growth beyond maturity levels, and valuation upside depends on sustained system expansion.
2. Operating Margins: 15.8%
Operating margins expanded from 11% in 2021 to 17.1% recently as scale benefits and cost discipline improved profitability across a growing restaurant base.
The model assumes 15.8% margins as labor efficiency, pricing power, and digital throughput offset reinvestment and wage pressure across several thousand locations.
This assumption breaks if food or labor costs rise faster than pricing, because margin protection relies on consistent operational execution rather than incremental leverage.
This sits below the 1-year operating margin of 17.1%, because reinvestment and normalization temper peak profitability, and valuation assumes margin stability rather than further expansion.
3. Exit P/E Multiple: 34.5x
Chipotle stock traded near 35.6x earnings over the last year as durable margins and consistent unit growth supported a premium valuation versus restaurant peers.
The model applies a 34.5x exit multiple, capitalizing normalized earnings after growth and margin assumptions already embed scale benefits and efficiency gains.
This multiple compresses quickly if revenue or margin assumptions fall short, because terminal valuation depends on sustained earnings quality rather than sentiment expansion.
This sits below the 1-year P/E of 35.6x, because growth moderates and margins normalize, and valuation assumes market-level discipline rather than multiple re-rating.
What Happens If Things Go Better or Worse?
Chipotle stock depends on brand-led demand, restaurant expansion discipline, and cost control, setting up a range of possible paths through 2030.
- Low Case: If traffic softens and food or labor costs rise, revenue grows around 8.9% and margins stay near 11.6% → 9.4% annualized return.
- Mid Case: With store growth and digital demand holding steady, revenue growth near 9.8% and margins improving toward 12.4% → 15.1% annualized return.
- High Case: If throughput gains and pricing discipline persist, revenue reaches about 10.8% and margins approach 13.1% → 20.3% annualized return.
How Much Upside Does Chipotle Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
