CHIPOTLE MEXICAN GRILL INC (NYSE:CMG) was identified by our screener as a strong growth stock with a favorable technical setup. The company combines solid fundamentals with a potential breakout pattern, making it worth a closer look.
Strong Growth Fundamentals
Growth Rating (7/10): CMG has demonstrated consistent revenue and earnings growth, with revenue increasing by 12.57% over the past year and earnings per share (EPS) growing at an average of 31.99% annually. Future projections suggest continued growth, with EPS expected to rise by 18.61% yearly.
Profitability (8/10): The company maintains strong margins, with a 17.25% operating margin and a return on invested capital (ROIC) of 18.96%, outperforming most peers in the restaurants industry.
Financial Health (8/10): CMG has no debt and a solid Altman-Z score of 9.67, indicating low bankruptcy risk.
Technical Setup Indicates Potential Breakout
Setup Rating (7/10): Despite a weak overall technical score (1/10), CMG is consolidating near a key resistance zone between $51.20 and $52.03. A breakout above this level could signal further upside.
Recent Price Action: The stock is trading near the upper end of its recent range ($45.21 - $52.51), suggesting momentum may be building.
While CMG’s valuation appears expensive with a P/E of 44.14, its strong growth and profitability justify a premium. Investors should watch for a confirmed breakout above resistance.
This is not investment advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.