If you are invested in Chipotle, you have to first asses the situation and ensure that this is an isolated case. There is a difference between an isolated case and full fledged contamination. The best case is that it is an isolated case and this allows you to purchase the stock at a discount because the market tends to overact. As an investor, it is your job to not overact and adjust your holdings appropriately.
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
Despite this being potentially an isolated case, any news that is along these lines are going to scare investors, especially those who have been down this road before with their money on the line. Brand image when it comes to food is critical and could build and ruin a business. Right now, I think everything should be fine, but if this does get out of hand you may want to look at alternatives in the space.
Chipotle is still a leader in healthier fast food and people swear by their food, at least the fans. However, as the market continues to shift, healthier options are in demand and that only means competition will increase for this seasoned company. With the current situation and news, this could be a volatile play but with the recent sell off could bring a cheaper entry point.
There are alternatives in this space but Chipotle is still sticking around. The only way I would completely ignore the company is if this scales into a chain wide issue and not just one restaurant. A norovirus is probably more common than we think, but since it is with a business who has had food concerns in the past, it makes for a better story in the media. Now is the time I would evaluate your holdings and if you felt this move, you may needs to diversify away some of the risk. Keeping a watchful eye on the news and company is the best situation right now and you can adjust as the news or lack of news is released.
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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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