Let's talk about the popular Chipotle Mexican Grill, Inc. (NYSE:CMG). The company's shares received a lot of attention from a substantial price increase on the NYSE over the last few months. The company is inching closer to its yearly highs following the recent share price climb. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Chipotle Mexican Grill's outlook and valuation to see if the opportunity still exists.

What Is Chipotle Mexican Grill Worth?

According to our valuation model, Chipotle Mexican Grill seems to be fairly priced at around 16.92% above our intrinsic value, which means if you buy Chipotle Mexican Grill today, you'd be paying a relatively reasonable price for it. And if you believe the company's true value is $56.08, then there isn't really any room for the share price grow beyond what it's currently trading. So, is there another chance to buy low in the future? Given that Chipotle Mexican Grill's share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Chipotle Mexican Grill?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. Chipotle Mexican Grill's earnings over the next few years are expected to increase by 63%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in CMG's positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you've been keeping an eye on CMG, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it's worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Chipotle Mexican Grill at this point in time. In terms of investment risks, we've identified 1 warning sign with Chipotle Mexican Grill, and understanding it should be part of your investment process.

If you are no longer interested in Chipotle Mexican Grill, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.