Fool Video: Is Chipotle Overvalued?

By Mac Greer
October 1, 2007 | Comments (2)

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Shares of Chipotle Mexican Grill (NYSE: CMG) (NYSE: CMG-B) have nearly doubled in the past six months. The burrito business now sports a market capitalization of around $4 billion -- three times the market cap of Panera Bread (Nasdaq: PNRA). So is Chipotle overvalued, or is it the next Starbucks (Nasdaq: SBUX)? In this installment of "Fool Video," I ask Motley Fool analyst Tim Beyers.

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Got a comment or suggestion? Email us at video@fool.com.

Neither Tim nor Mac owns shares of Chipotle or any other stocks discussed. Starbucks is a Motley Fool Stock Advisor recommendation. Chipotle is a Rule Breakers recommendation, and its B shares have been recommended by Motley Fool Hidden Gems. The Fool has a disclosure policy.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 01, 2007, at 11:51 PM, bigbenjamins2 wrote:

    Who did you get to dress up as Benjamin Franklin?

    The comparison to Starbucks is an interesting one. I've never really thought about that before. Both are chain businesses in the food services industry, but what are the other similarities?

  • Report this Comment On October 02, 2007, at 7:17 AM, TMFMileHigh wrote:

    Hi BigBenjamins,

    Who dressed up as Ben Franklin? I'd love to say it was David and Tom's crazy uncle Bill but, alas, I've no idea.

    Other similarities to Starbucks:

    1. Powerful brand and loyal repeat customer base.

    2. Addictive product. (You need to try a loaded carnitas burrito if you don't know what I'm talking about.)

    3. Self-funded growth through excellent cash flow.

    Does that help?

    Tim

    TMFMileHigh

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Related Tickers

11/24/2009 2:20 PM
CMG $83.86 Down -1.28 -1.50%
Chipotle Mexican G… CAPS Rating: ***
CMG-B $83.16 Down -1.18 -1.40%
CHIPOTLE MEXICAN G… CAPS Rating: *****
PNRA $63.61 Down -0.60 -0.93%
Panera Bread Compa… CAPS Rating: **
SBUX $21.30 Down -0.31 -1.43%
Starbucks Corp CAPS Rating: **

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