Chipotle (CMG) – Best Restaurant Growth Stock

• Chipotle beat the earnings consensus by $0.05 posting $1.90 vs. consensus of $1.85
• Chipotle (CMG) is worth keeping an eye on because it is the fastest growth and highest valuation restaurant stock in the world.
• Same store sales were 11.3% which is a tremendous result. Chipotle has been adept at continuing to move the lines in the stores quicker.
• Chipotle likes its restaurant base so much it owns all of them – which is a very different model relative to McDonald’s and Yum Brands. Owning the restaurants requires more capital but enables Chipotle to capture all the profit from each unit and leverage corporate expenses easily when sales are robust.
• Chipotle is accelerating their new restaurant openings. Growth still has a long runway in the US and has only begun in Europe and around the world
• Next year earnings will likely be between $10-$12 per share
• 2013 earnings will like be $14-$15 per share
• While the valuation of the stock is very high, investors really believe in the growth of the CMG restaurant base so that every dip gets bought quickly.
• The stock price is $330 but appears sustainable with the potential to move higher as overseas results demonstrate more growth avenues.
• The Chipotle market capitalization is now above $10B.
• The short interest is 10.5% of the float

Tags: Chipotle, CMG, Europe, growth, McDonald's, restaurants, Yum Brands