There are certainly a couple ways of looking at this situation, and given the popularity of the company today, I would look past the issues of days ago and focus on the company going forward because it appears they are going to be around still. From a technical standpoint, you can see the chart bounced off a support area around $354 and is going to the upside. Watch these levels because it could indicate a turn back to the upside and a chase after the previous highs.
Of course there is the fundamental issue of the company losing sales to the food issue, but if they are stable going forward, they should be able to recoup many of their lost customers because they will begin to forget and go back to their old habits. Certainly you want to keep an eye out for another issue because one more contamination story could likely spell the end of the company. Be sure to confirm their sales numbers from when the issue occurred until now and make sure people are returning.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Chipotle Mexican income statement, its balance sheet, and the statement of cash flows. Potential Chipotle Mexican investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Chipotle Mexican investors may use each financial statement separately, they are all related. The changes in Chipotle Mexican's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Chipotle Mexican's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Chipotle Mexican
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Chipotle Mexican performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Chipotle Mexican shares is the value that is considered the true value of the share. If
the intrinsic value of Chipotle is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Chipotle Mexican. Please read more on our
fundamental analysis page.
How effective is Chipotle Mexican in utilizing its assets?
Chipotle Mexican Grill reports assets on its Balance Sheet. It represents the amount of Chipotle resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Chipotle Mexican aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Hotels, Restaurants & Leisure space. To get a better handle on how balance sheet or income statements item affect Chipotle volatility, please check the breakdown of all its
fundamentals.
Are Chipotle Mexican Earnings Expected to grow?
The
future earnings power of Chipotle Mexican involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Chipotle Mexican factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Chipotle Mexican
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Chipotle
expected earnings.
Chipotle Mexican Gross Profit
Chipotle Mexican Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Chipotle Mexican previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Chipotle Mexican Gross Profit growth over the last 10 years. Please check Chipotle Mexican's
gross profit and other
fundamental indicators for more details.
Breaking it down
Some risks to keep in mind is first, the pressure on fast food and the quality of food. Minus the previous issues, Chipotle continues to pride themselves on having high quality foods and giving people the best options possible, but the issue remains there are healthier options out there. Another risk to keep in mind is the shear amount of competition in the food space and the fact it continues to become more intense. In order to maintain the market share, the company has to ensure they have quality food and their brand image is upheld.
Going forward, look at the growth in sales to ensure people are going back and keep track on the cash flow. Also, compare Chipotle against others in the market because if you want to be in the fast food space, there could be better options that provide more value for your dollar. Chipotle has done well to rid past issue and just keep moving forward, however, the possibility lies that this issue could arise again. Ensure your portfolio can handle to potential risks and if you still have questions, reach out to an investing professional and they can help to point you in the right direction.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Chipotle Mexican Grill. Please refer to our
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