Is Chipotle Mexican Grill, Inc. (CMG) Fairly Valued?
Chipotle Mexican Grill, Inc. valuation review using P/E, fair value, revenue growth, EPS growth, net margin, and TGMCharts chart exhibits as of July 10, 2026.
By TGMCharts Research · Data as of · Updated
Evaluating the investment case for Chipotle Mexican Grill, Inc. requires balancing its market-derived multiples against its underlying business momentum. The stock is currently priced at 32.34x trailing earnings, which places it above the independent analyst DCF (FMP) fair value estimate of $27.51.
A comprehensive fundamental analysis must determine if the company's operational velocity justifies its premium pricing. Key pillars of support include a five-year revenue CAGR of 14.79%, a five-year EPS CAGR of 35.70%, and a net margin of 11.96%. These metrics indicate whether the current premium is sustainable or represents a stretched valuation.
- Chipotle Mexican Grill, Inc. closed at $35.25 on July 10, 2026.
- Trailing P/E is 32.34x and price-to-sales is 3.78x.
- Analyst DCF (FMP) is $27.51 with margin of safety at -21.96%.
- Five-year revenue CAGR is 14.79% and five-year EPS CAGR is 35.70%.
- Earnings yield is 3.09% and net margin is 11.96%.
Valuation Setup
The market price, model anchor, growth support, and profitability facts behind the valuation read.
Evaluating the Premium Multiple and Burden of Proof
Analyzing Chipotle Mexican Grill, Inc. requires assessing whether the company's financial momentum is strong enough to sustain its elevated market multiple. Following the market close on July 10, 2026, the stock traded at $35.25 with a trailing earnings multiple of 32.34x. This market pricing sits above the third-party analyst DCF (FMP) fair value estimate of $27.51, which translates to an implied margin of safety of -21.96%.
To determine if this premium is justified, we must look beyond any single valuation metric. A rigorous fundamental assessment requires evaluating the company's price-to-sales ratio, earnings yield, historical revenue and earnings growth, and net profit margins as an integrated system. When these operational indicators align, the valuation has a solid foundation; when they diverge, investors face increased risk.
Assessing Market Multiples and Capital Yields
Before evaluating whether the market's appraisal is reasonable, we must examine the specific multiples investors are paying. The company currently commands a price-to-sales ratio of 3.78x, which corresponds to an earnings yield of 3.09%. This yield represents the cash flow return generated per dollar of equity value, serving as a direct counterweight to the headline trailing price-to-earnings multiple.
CMG P/E ratio Chart
The trailing earnings multiple is the main valuation exhibit because it connects the market price to reported earnings.
Latest P/E ratio: 32.34x as of July 10, 2026.
A P/E ratio of 32.34x has to be judged against the company's five-year EPS CAGR of 35.70%. If the multiple is high while EPS support is ordinary, the valuation thesis becomes more dependent on investor confidence than on fresh earnings power.
CMG price-to-sales Chart
Price-to-sales gives a second valuation lens when margins and earnings can move around the cycle.
Latest price-to-sales ratio: 3.78x.
Price-to-sales at 3.78x is most useful beside net margin of 11.96%. A richer sales multiple is easier to defend when margin quality is durable rather than temporarily elevated.
Comparing Current Price to DCF Benchmarks
As a baseline reference, the independent analyst DCF (FMP) model establishes a fair value of $27.51, placing the current market price above this intrinsic estimate and resulting in a negative margin of safety of -21.96%. While this third-party model provides an objective benchmark, it does not represent a definitive verdict; investors should review a range of cash flow scenarios to assess how different growth and margin assumptions impact intrinsic value.
The valuation at a glance
Each input on its own line: what the stock costs against earnings and sales, the model's fair value and how far price sits from it, and the growth and margins behind the business.
CMG earnings yield Chart
Earnings yield reframes valuation from an owner's-yield perspective rather than a multiple perspective.
Latest earnings yield: 3.09%.
The earnings yield of 3.09% is the counterweight to the P/E ratio. If the yield is thin relative to the quality and growth profile, the valuation case needs more help from future compounding.
Aligning Top-Line and Bottom-Line Growth Trends
For a premium valuation to hold, the business must demonstrate robust top-line and bottom-line expansion. Over the past five years, the company has delivered a revenue CAGR of 14.79% alongside an EPS CAGR of 35.70%. Comparing these two growth rates reveals whether the company is expanding its core business volume or primarily relying on margin expansion and financial leverage to drive per-share earnings.
CMG revenue
Revenue history tests whether the valuation is being supported by real business expansion.
Five-year revenue CAGR: 14.79%. This is endpoint-to-endpoint from the fiscal years shown — a depressed start year can inflate it, so read it against the recent bars.
Revenue growth is the business-expansion evidence behind the valuation read. A five-year revenue CAGR of 14.79% helps show how much of the valuation story is coming from company growth instead of only multiple expansion.
CMG EPS
EPS history checks whether reported earnings are keeping pace with the market multiple.
Five-year EPS CAGR: 35.70%. This is endpoint-to-endpoint from the fiscal years shown — a depressed or negative start year can inflate it, so read it against the recent bars.
A five-year EPS CAGR of 35.70% is the clearest support figure for a P/E-based conclusion. If EPS growth slows while the multiple remains elevated, the article should become more cautious after refresh.
Analyzing Profitability Margins Against Sales Multiples
Profitability margins serve as the critical bridge transforming raw sales growth into tangible shareholder value. The company currently generates a net margin of 11.96% alongside its price-to-sales ratio of 3.78x. A high sales multiple is far more defensible when supported by structurally high and durable profit margins; however, if current margins are near cyclical peaks, any future normalization could put downward pressure on the earnings multiple.
CMG net margin
Net margin shows whether the company has enough profitability quality to support its valuation.
Net margin (TTM): 11.96%. The bars below are annual fiscal years.
Net margin of 11.96% is a quality signal, not a valuation verdict by itself. It matters because a premium multiple is more defensible when margins are structurally strong and less defensible when margins are peaking.
Balancing the Bull and Bear Valuation Cases
The optimistic outlook for the stock relies on the company maintaining its strong five-year revenue and EPS growth trends while preserving its high net margin. Conversely, the cautious view highlights that a trailing earnings multiple of 32.34x leaves little room for operational missteps, making the stock highly sensitive to any deceleration in consumer spending or pressure on restaurant operating costs.
Bull and bear case
Valuation support
- Five-year revenue CAGR of 14.79% and five-year EPS CAGR of 35.70% support the business case.
- Net margin of 11.96% is the quality check behind the multiple.
Valuation pressure
- A P/E ratio of 32.34x can become demanding if EPS growth slows.
- The analyst-DCF (FMP) margin of safety at -21.96% should change the valuation read if it deteriorates after refresh.
Identifying Key Operational and Market Falsifiers
Several clear developments would alter this fundamental assessment. On the market side, a significant convergence or divergence between the stock price and the analyst DCF (FMP) reference of $27.51 would directly shift the margin of safety. Operationally, any material deviation from the historical five-year EPS CAGR of 35.70% or a contraction in the net margin from its current level of 11.96% would undermine the core support for the current multiple.
Synthesizing the Fundamental Valuation Outlook
In conclusion, justifying the current valuation of Chipotle Mexican Grill, Inc. requires sustained execution across multiple financial dimensions. The market multiple, cash flow projections, top-line growth, and profit margins must all continue to perform at high levels. This analysis is based on verified historical data and does not constitute personalized financial advice or a specific investment recommendation.
FAQ
Is CMG fairly valued?
Chipotle Mexican Grill, Inc. trades at 32.34x trailing earnings with an analyst-DCF (FMP) margin of safety of -21.96%. The cleanest read comes from comparing that valuation to five-year revenue CAGR of 14.79% and five-year EPS CAGR of 35.70%.
What valuation metric matters most for CMG?
This article anchors on P/E, fair value, margin of safety, price-to-sales, earnings yield, revenue growth, and EPS growth. No single metric is treated as a recommendation.
How often should this CMG valuation view refresh?
We refresh this note after each daily market close, so the price, fair value, and every figure stay current. Numbers here are as of July 10, 2026.
What would change our mind
- A material move away from the analyst-DCF (FMP) reference of $27.51.
- A break in five-year EPS support, currently 35.70%.
- Margin quality drifting away from the latest net margin of 11.96%.
The bottom line
Chipotle Mexican Grill, Inc. valuation research note from TGMCharts Research, grounded in precomputed fundamentals, chart exhibits, and a frozen claim ledger.
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Data snapshot · By TGMCharts Research.
Every number in this note comes from data we compute and store ourselves from the company's reported figures, plus verbatim excerpts from its SEC filings. When a value isn't available we say so — we never fill gaps with estimates.
Latest filing excerpt
10-Q · filed 2026-04-30 · period 2026-03-31 · SEC EDGAR source
- “The guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted, and may be applied retrospectively.”
- “Under the new guidance, public entities shall begin capitalizing software costs when 1) management has authorized and committed to funding the software project and 2) it is probable that the project will be completed and the software will be used to perform the function intended.”
- “The guidance is effective for fiscal years beginning after December 15, 2027, with early adoption permitted, and can be applied on a prospective, retrospective, or modified prospective basis.”
- “We are currently evaluating the impact of adopting the new accounting guidance on our consolidated financial statements.”
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