Is Chipotle Stock Overvalued?
In this edition of The Motley Fool's "Ask a Fool" series, Motley Fool analysts Jason Moser and Brendan Mathews take a question from a reader who asks, "Is Chipotle overvalued now?"
From a pure numbers perspective, Jason thinks one can make the argument that Chipotle is overvalued. At 47 times earnings, there's a lot of optimism baked into the price today versus something like a Panera, which trades at basically half that -- and Panera actually has more stores. However, Chipotle has always traded at a premium, and for good reason. With its deliberate growth strategy, simple menu, and management team steeped in operational excellence, Chipotle stores are extremely profitable, and this should continue for some time to come. Jason thinks investors need to look at Chipotle as a 20-year holding. From that perspective, the stock looks like a more attractive opportunity with plenty of room to grow.
Warren Buffett just bought nearly 9 million shares of this company
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 --per hour. (That's almost as much as the average American makes in a year!) And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has over 50% market share. Just click hereto discover more about this industry-leading stock and join Buffett in his quest for a veritable landslide of profits!
The article Is Chipotle Stock Overvalued? originally appeared on Fool.com.Brendan Mathews has no position in any stocks mentioned. Jason Moser owns shares of Chipotle Mexican Grill. The Motley Fool recommends Chipotle Mexican Grill. The Motley Fool owns shares of Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.