Post by lookingforatenbagger on Apr 21, 2023 16:07:35 GMT
Apr 21, 2023 at 9:53AM
"Chipotle has been a standout performer even as the broader market has struggled. Can it keep up this trend?"
"The caveat:
There is a small problem here. Chipotle's valuation is, to put it mildly, elevated. The price-to-sales ratio is 5.7, a bit higher than the five-year average of 5. The price-to-earnings ratio is 55, notably lower than the longer-term average of 84 but hardly low. And the price-to-book value ratio is nearly 21, well above the five-year average of about 16.
Investors are already pricing in a lot of good news, and value investors will probably want to avoid Chipotle shares. However, growth-oriented investors will likely still find the fast-growing company attractive given the long-term opportunity for expansion that exists. Just make sure to keep an eye on the business. If the company stumbles, even if it is just for a quarter or two, the market could quickly turn negative on the stock."
www.fool.com/investing/2023/04/21/market-sell-off-is-chipotle-mexican-grill-a-buy/?source=eptyholnk0000202
"Chipotle has been a standout performer even as the broader market has struggled. Can it keep up this trend?"
"The caveat:
There is a small problem here. Chipotle's valuation is, to put it mildly, elevated. The price-to-sales ratio is 5.7, a bit higher than the five-year average of 5. The price-to-earnings ratio is 55, notably lower than the longer-term average of 84 but hardly low. And the price-to-book value ratio is nearly 21, well above the five-year average of about 16.
Investors are already pricing in a lot of good news, and value investors will probably want to avoid Chipotle shares. However, growth-oriented investors will likely still find the fast-growing company attractive given the long-term opportunity for expansion that exists. Just make sure to keep an eye on the business. If the company stumbles, even if it is just for a quarter or two, the market could quickly turn negative on the stock."
www.fool.com/investing/2023/04/21/market-sell-off-is-chipotle-mexican-grill-a-buy/?source=eptyholnk0000202
