Chipotle Stock Is Down 31% in 12 Months – Is It a Buy Ahead of July 29 Q2 Earnings?
Chipotle's own management spent billions buying back stock at prices well above where shares trade today, and Wall Street analysts see a 43% bounce ahead of this week's earnings report. The question is whether a traffic slump will overshadow the…
The bull thesis for Chipotle Mexican Grill (NYSE:CMG | CMG Price Prediction) today is straightforward: management repurchased $2.4B of stock in 2025 at an average price of $42.54. Shares now trade well below that mark at about $31.79, and the company has about $1.7 billion in fresh share repurchase capacity ahead of Q2 earnings results arriving on July 29. The current level marks a notable reset for a business that has historically compounded.
Three Reasons Chipotle Stands Out Right Now
The stock is down 30% in the past year. CMG trades at a P/E of 29 against a forward EPS of $1.35, with the stock sitting 30.5% below where it traded a year ago. Over the past decade, shares have still returned 268.92%. The 2026 drawdown reflects multiple compression while unit economics have held.
The path from 4,000 to 7,000 stores. Chipotle ended 2025 with 4,042 company-owned locations and is guiding 350 to 370 new openings for 2026 against a long-term target of 7,000 restaurants in the U.S. and Canada. Full-year 2025 operating cash flow reached $2.114 billion. That funds the build-out without leverage.
Wall Street sees upside. Analyst ratings sit at 26 Buy, 10 Hold, 0 Sell, with a consensus price target of $42.94, implying about 43% upside with the stock trading around $33. Polymarket traders assign a 60.5% probability to a Q2 earnings beat this Wednesday.
Chipotle Offers More Scale Than CAVA and More Growth Than McDonald’s
CAVA Group (NYSE:CAVA) is a growth darling in this industry, but CAVA trades at a materially richer earnings multiple against a much smaller footprint. Chipotle offers roughly one-quarter the earnings multiple on nearly nine times the store base and superior cash generation.
McDonald’s (NYSE:MCD) trades at a lower earnings multiple and offers a dividend yield, but Chipotle’s restaurant growth pace is materially faster. Today, Chipotle offers investors both growth and value.
Weak Traffic Is the Number to Watch on Wednesday
Chipotle’s biggest near-term challenge is weak customer traffic, with comparable sales down 2.5% and transactions down 3.2% in Q4. However, restaurant-level margins remain above 23%, the company can fund hundreds of annual openings without taking on debt, and management continues to repurchase shares.
Wednesday’s report will show whether new menu initiatives can stabilize traffic while Chipotle continues expanding toward 7,000 locations. If those trends improve, today’s price could prove attractive relative to management’s own buyback activity and Wall Street’s $42.94 average target.
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Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 250 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.
Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.
He specializes in breaking down complex companies into clear, actionable insights for everyday investors, with a focus on fundamentals-driven research.
His work has also been featured on platforms including Seeking Alpha and Sure Dividend.
Outside of work, Thomas enjoys weight lifting and soccer.
