Why Chipotle's Stock Is the Bomb

There's no denying that Chipotle Mexican Grill (NYSE: CMG  ) , recent events aside, has been an amazing stock to own over the last few years. But to really appreciate how impressive its stock is, and to get an idea if it's a "buy," we need to look at how the burrito chain compares to its competitors.

Metric	Chipotle	Industry Average	Industry Rank (out of 30)**
Market Cap	$9 billion	$1.2 billion*	3
5-Year EBITDA Growth (CAGR)	35%	5%	1
Same-Store Sales Growth (MRQ)	8%	3%	5
5-Year Revenue Growth (CAGR)	23%	7%	2
Net Profit Margin	10%	7%	6
Cash and  Equivalents	$456 million	$51 million*	4
Debt	$3.6 million	$222 million*	3
P/E Ratio	34	22	3

Sources: Finviz.com, Screener.co, and Chipotle's 2Q12 Earnings Release. EBITDA = earnings before interest, taxes, depreciation, and amortization. CAGR = compound annual growth rate. MRQ = most recent quarter. *Median substituted for average. **Various industry participants were excluded to achieve a representative sample.

As you can see, Chipotle is at or near the top across the board. Even though it's the third largest publicly traded restaurant in terms of market capitalization -- behind only McDonald's (NYSE: MCD  ) and Yum! Brands, the proprietor of KFC, Pizza Hut, and Taco Bell -- it continues to record stellar growth figures, ranking first in earnings growth, second in revenue growth, and fifth in same-store sales growth.

Its closet competitors here are Buffalo Wild Wings (Nasdaq: BWLD  ) -- which recorded comparable earnings and revenue growth of 28% and 23%, respectively -- and Arcos Dorados (NYSE: ARCO  ) , the largest McDonald's franchisee in Latin America, which recorded monster 10.4% comps for the just-concluded second quarter.

In addition, the chain converts an above average proportion of its sales dollars to profit, as evidenced by its fifth place standing in net margin -- though, for those of you impressed by these things, Chipotle's stellar 10% figure is still only half of McDonald's!

Finally, it sports a balance sheet that would make even first-year business students salivate, with a ridiculous $456 million in cash versus only $3.6 million in debt. Indeed, only Panera Bread (Nasdaq: PNRA  ) and BJ's Restaurants even come close in this regard, with no debt and $222 million and $45 million in cash, respectively. With this in mind, my colleague Andrew Marder recently recommended Panera as one of three companies to replace our burrito-slinging muse.

Is its stock worth the price?
Given these impressive figures, it'd be easy to conclude that Chipotle is a contender for any legitimate portfolio. Yet because of this performance, investors have bid up the price of its shares; it's now the third most expensive restaurant stock according to the price-to-earnings ratio, which reveals how much you have to pay for each dollar of earnings.

Two months ago, I would have urged investors to steer clear, as its shares were trading for a monster 44 times earnings. But after the chain's disappointing earnings release, they're far more affordable, trading at 36 times earnings today. Not to mention, as fellow Fool Jeremy Bowman recently pointed out, the chain hasn't even begun to deploy its arsenal of secret weapons, which are essentially guaranteed to increase the company's revenue and earnings for the foreseeable future.

Personally, as I've said before, I think Chipotle is a steal at the current valuation, which is why I gave it a coveted "outperform" CAPScall. Yet each investor and portfolio is different, and only you can answer this question yourself. Prior to doing so, however, I urge you to download our recently released free report about three stocks that our analysts are calling "middle-class millionaire-makers." Click here to view the free report.