Chipotle Mexican Grill Inc. (NYSE:CMG) has been on a blistering run in recent times. The company announced its earnings for the first quarter of 2012 today of $1.97 per share with revenues reported at $640.6 million. In the first quarter of 2011 the company posted earnings of $1.46 per share on revenue of $509 million in sales. The company’s massive expansion has fueled investment in the stock, the value of which now stands at 50 times proje
cted earnings for 2012.
Analysts writing previous to the the announcement had projected, on average, that the company would pull in revenue of around $630.6 million in the three months and turn that into earnings of $1.93 per share. In the last quarter, Q4 2011, the company earned $1.81 per share on $596.7 million in revenue. That fell slightly short of analyst’s expectations of $1.83 per share.
In a rare interview with Harvard Business School that was published online earlier this month, (it has since been taken down) value investor Seth Klarman spoke at length about his investment process, philosophy and the changes value investors have had to overcome during the past decade. Klarman’s hedge fund, the Boston-based Baupost has one of Read More
Chipotle Mexican Grill has been operating since 1993. In that time it has grown from a base of 13 restaurants to its current total of more than 1200 outlets worldwide. The company’s brand of quality fast Mexican food is a hit with customers. The company keeps an image of a real restaurant operating quickly rather than a traditional fast food outlet allowing them to offer their product at a much higher price.
Chipotle announced a share buy back program in their report from the last quarter. That program will be retake about $100 million worth of the company’s stock. The company has managed to increase both its revenues and earnings year on year for over a decade running, an impressive metric. Investors are poring into the stock at a fast rate and as a look at it’s chart will show the gentle but constant incline from the start of the year will have paid off for at least some of them. Those that buy in now are certainly risking more at almost $440 per share.
The company actually rose its prices in the first quarter looking to increase its margins. In their casual eating setting it will be a learning experience to see how much customers are willing to pay before volume causes the firm’s revenue to decline.
Chipotle’s share’s continue to hit new highs despite their massive valuation. The company began the year at just 337.74 but has since risen to a height of 442.40, just in the last week. The company’s shares are trading a little lower than that today after opening at 439.42. The company will hope the stock reaches new heights tomorrow after today’s announcement and that doesn’t seem entirely unlikely in the current climate surrounding the company.