Earlier this week, I wondered whether it would be worth the risk to short shares of burrito maker Chipotle Mexican Grill (CMG 0.09%). 

After all, I noted the opinion voiced by DoubleLine Capital CIO Jeffrey Gundlach, who caused some investors to run for the exits last week when he called the stock a "good short."

The short dilemma
I suppose it wasn't particularly hard to rationalize his train of thought; Gundlach eventually ended up being right about shorting shares of Apple around $610 per share, and Chipotle had steadily marched up by almost 45% from its 52-week low set last October.

Source: Chipotle Mexican Grill.

Even so, I wasn't convinced Chipotle's stock was broken, so I concluded that investors should maintain a long-term focus. "Let the bears take their short-term profits if they can; over the long-term," I wrote, "it's the bulls who are set to enjoy truly substantial gains with Chipotle."

As it turns out, the bears may not get their chance for a while yet; to the contrary, shares of Chipotle are trading up more than 10% as of this writing after the company put the wraps on a solid first quarter.

The numbers
Curiously enough, when all was said and done, Chipotle's comparable restaurant sales increased a meager 1% while restaurant-level operating margin decreased 110 basis points to 26.3%. Even so, management had already warned investors in February to expect flat to low-single-digit comparable sales -- at least for as long as they choose not to increase menu prices. Furthermore, the 26.3% operating margin was actually an improvement over last quarter's 24.6%.

In addition, first-quarter revenue increased 13.4% year over year to $726.8 million (primarily thanks to a whopping 48 new restaurant openings during the quarter), and net income rose an even more impressive 22.2% from the same period last year to $76.6 million.

Going forward, management also reiterated their confidence of the company's ability to deliver at the high end of its existing guidance of opening between 165 and 180 new locations in 2013, with an emphasis on slightly smaller restaurants, which afford Chipotle lower development occupancy and operating costs.

All in all, even as competitor and Taco Bell operator Yum! Brands (YUM 0.20%) continues to struggle mightily overseas, Chipotle's great quarter seems to have effectively dispelled both investors' concerns for low comparable sales as well as questions surrounding the company's ability to continue growing both quickly and profitably.

Foolish final thoughts
Still, while Chipotle may look expensive on the surface trading at 41 times trailing earnings -- Yum! Brands' P/E ratio sits at just 19.2 -- remember that outward appearances can be deceiving.

Chipotle is not only growing like a weed, but also manages to consistently generate plenty of cash flow, boasts strong returns on capital north of 22%, and ended last quarter with $700 million in cash and no debt on its balance sheet -- not bad for a company whose entire market cap is $11 billion. Suffice it to say, then, Chipotle's premium is well-deserved, and I'd have no problems buying the stock even after today's pop.