What happened

While shares of Chipotle (NYSE:CMG) initially rose more than a percentage point in after-market hours on Tuesday, following the company's third-quarter update, the stock is down more than 5% as of 11:00 a.m. EDT on Wednesday. The pullback comes despite Chipotle reporting revenue, adjusted earnings per share, and comparable-restaurant sales growth that were all well ahead of consensus analyst estimates.

Investors may be concerned about the company's decision to push some store openings into 2020 and management's expectations for higher costs due to its new carne asada. In addition, this may simply reflect a cooling-off of the stock price after a 92% gain leading up to the earnings report.

A chalkboard sketch of a chart showing a stock price moving lower.

Image source: Getty Images.

So what

Revenue rose 15% year over year in the fast-casual restaurant's third quarter -- an acceleration from 13% revenue growth in the prior quarter. Adjusted earnings per share soared 77%. Results were helped by an 88% increase in digital sales.

But management said a strategic decision to include more drive-thru Chipotlanes in new restaurants means longer construction times will delay some restaurant openings to next year. In addition, the company said in its third-quarter earnings call that it expects a benefit from improved avocado pricing to be mostly offset by higher costs of its carne asada during Q4.

Now what

Much of Chipotle stock's pullback on Wednesday could simply be the result of shares taking a breather after a long run-up. Shares currently trade at 72 times earnings and 4 times sales. While Chipotle definitely deserves to trade at a significant premium thanks to its rapid top-line growth and its widening restaurant operating margin, some investors could be using the earnings update as a time to reassess whether they believe the company is worth its $22 billion market capitalization.