Key Takeaways:
- Price Target: Chipotle Mexican Grill stock is valued at $55 per share by 2027 versus a $41 last close, based on 35x earnings.
- Potential Return: CMG shows 35% total upside from $41 to $55 over about 2 years, reflecting modest multiple compression.
- Model Drivers: Chipotle Mexican Grill assumes 9% revenue CAGR and a 17% operating margin by 2027, sustaining earnings growth quality.
- Annual Return: Chipotle Mexican Grill implies 17% annualized returns through 2027, which is equivalent to 35% total return in 1.9 years.
Chipotle Mexican Grill (CMG) operates fast-casual restaurants and generated about $12 billion in LTM revenue from burritos and bowls.
Chipotle stock grew 2024 revenue 15% to $11 billion, showing store demand still supports top-line expansion.
The company generated about $2 billion in LTM operating income at a 17% margin, which funds new stores and higher throughput.
In Q3 2025, Chipotle Mexican Grill posted $3 billion revenue and about $400 million net income, keeping profitability resilient.
CMG stock currently trades near $41 per share and the model targets $55 by 2027 as returns depend on 9% growth.
What the Model Says for CMG Stock
We analyzed Chipotle stock using current operating scale, margin stability, limited capital return reliance, and premium brand positioning in fast casual dining.
Based on 8.8% revenue growth, 16.5% operating margins, and a 34.9x exit P/E, the model projects $40.72 rising to $54.90.
That implies a 34.8% total return, or a 16.6% annual return over 1.9 years, ending at a $54.90 target.
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 CMG stock:
1. Revenue Growth: 8.8%
Chipotle expanded revenue from $8 billion in 2021 to nearly $12 billion LTM, reflecting sustained unit growth and pricing resilience.
Recent results show revenue rising about 15% in 2024, slowing from earlier years as the store base matures.
Forward growth depends on new restaurant openings, higher throughput, and digital sales expansion, while consumer spending pressure limits acceleration.
An 8.8% annual revenue growth balances historical double-digit expansion with a larger base and moderating industry demand.
2. Operating Margins: 16.5%
Chipotle lifted operating margins from about 11% in 2021 to roughly 17% LTM, showing strong labor leverage and food cost control.
Margins stabilized near 17% despite wage inflation, supported by pricing actions and higher average unit volumes.
Future margin risk comes from labor costs and promotional intensity, while scale efficiencies and digital mix support stability.
In line with analyst consensus projections, a 16.5% operating margin reflects normalized profitability slightly below recent peaks but above long-term averages.
3. Exit P/E Multiple: 34.9x
Chipotle historically traded between about 36x and 50x earnings during strong growth periods, reflecting premium brand positioning.
Current valuation near the mid-30x range signals investor caution after executive changes and moderating growth rates.
The exit multiple assumes earnings consistency and margin discipline persist, without a return to peak multiple expansion.
Based on street consensus estimates, a 34.9x exit multiple supports a $54.90 target price, implying 34.8% total upside and 16.6% annual return.
What Happens If Things Go Better or Worse?
Chipotle stock outcomes hinge on store economics, brand demand consistency, and cost control, creating distinct execution paths through 2029.
- Low Case: If traffic softens and cost pressure persists, revenue grows around 9.5% and margins stay near 11.8% → 11.4% annualized return.
- Mid Case: With core execution intact, revenue growth near 10.6% and margins holding around 12.6% → 18.7% annualized return.
- High Case: If unit growth and pricing outperform, revenue reaches about 11.6% and margins approach 13.2% → 25.5% annualized return.
How Much Upside Does It 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.
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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!
