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 (NYSE: CMG ) 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.
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