Chipotle Mexican Grill

Methodology

Chipotle's fast-casual restaurant model delivers strong unit economics and digital ordering adoption, creating consistent earnings growth from new store openings and same-store sales increases. The company's recovery from food safety issues and menu pricing power provide growth visibility. This fair value calculation works well for Chipotle given the predictable restaurant expansion model, though labor inflation and operational execution risks can impact margin assumptions.

Methodology

Chipotle's PEG ratio typically ranges from 1.5-2.5, reflecting premium valuations for a high-growth restaurant concept with double-digit earnings expansion from unit growth and operational leverage. The company's digital capabilities and strong brand justify higher multiples than traditional restaurant chains. Compare to other fast-casual and QSR restaurants to assess whether Chipotle's unit economics and growth runway warrant its premium positioning.

Methodology

Chipotle does not currently pay a dividend, reinvesting all capital into restaurant expansion, technology enhancements, and brand building. The PEGY mirrors the PEG, offering no additional insight. For Chipotle investors, focus remains on new unit development, same-store sales momentum, digital penetration, and maintaining industry-leading margins rather than seeking traditional capital returns.