Chipotle Mexican Grill, Inc. (CMG) receives a weak valuation score of 32 from InvestorsObserver's analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. CMG holds a better value than 32% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.
Metrics Analysis
CMG's trailing-12-month Price to Earnings (PE) ratio of 96.9 puts it above the historical average of roughly 15. CMG is a poor value at its current trading price as investors are paying more than what its worth in relation to the company's earnings. CMG's trailing-12-month earnings per share (EPS) of 14.27 does not justify what it is currently trading at in the market. Trailing PE ratios, however, do not factor in a company's projected growth rate, resulting in some firms having high PE ratios due to high growth potentially enticing investors even if current earnings are low.
CMG currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 3.07. The market is currently overvaluing CMG in relation to its projected growth due to the PEG ratio being above the fair market value of 1. CMG's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.
Summary
All together these valuation metrics paint a pretty poor picture for CMG at its current price due to a overvalued PEG ratio despite strong growth. The PE and PEG for CMG are worse than the average of the market resulting in a valuation score of 32.
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