Chipotle Mexican Grill (NYSE:CMG) investors have been sitting pretty for the past two years. The stock has more than tripled since bottoming out in early 2018, and it hit another all-time high on Friday.

With big gains come big volatility, and two weeks ago I spelled out some of the things can go wrong for Chipotle. Let's flip the script and give the fast-casual turnaround story some bullish praise. Here are some of the things that can go right for the "food with integrity" chain.

A Chipotle burrito in a basket with a side of guac and chips.

Image source: Chipotle Mexican Grill.


1. Positive comps can continue

Folks keep flocking to Chipotle. The chain is working on a winning streak of seven consecutive quarters of positive comps, and this is a pretty big deal. Any chain can rattle off four straight quarters of positive same-store sales after a rough year, but when you keep going after that, you're building off of strong periods a year earlier. 

Chipotle isn't just squeezing through positive gains at the store level. Comps accelerated to an 11% burst in its latest quarter, fueled largely by a 7.5% year-over-year increase in the number of transactions taken in at the average store. Momentum is on its side, and it's hard to see the stock tanking if popularity at the unit level continues to improve. 

2. Chipotle can score more hits on the menu

One of the best things former Taco Bell helmsman Brian Niccol has brought over since taking over as CEO two years ago is the willingness to gamble on new items. Taco Bell is a master at hyping up limited-time offerings, and sometimes they wind up being so popular that they stick to the regular menu. 

We saw this happen late last year, when carne asada was a limited-time protein option. By mid-November, the chain was saying that the popular seasoned beef offering would stick around until early 2020. It may stick around even longer than that, but if it doesn't, Chipotle knows it's an item it can put back on the menu to drum up near-term demand. 

Chipotle has had the benefit of running a test kitchen in New York City for years, but it has been hesitant to go nationwide with test items. Niccol isn't as set in his ways as previous leadership, and that improves Chipotle's chances of landing another hit product. 

3. Digital sales can keep growing 

It took Chipotle some time to get digital sales rolling, but now it's a key catalyst to the chain's turnaround. Digital sales have risen 88% over the past year, accounting for 18% of the burrito roller's sales in its latest quarter. Digital sales are driving the acceleration in comps, and the freaky good thing here is that the chain could just be getting started.

Mobile ordering and the growing popularity of third-party delivery apps are drumming up digital sales, and Chipotle is helping make things better by offering up a second prep line dedicated to filling these orders, as well as adding drive-thru "Chipotlanes" in newer standalone or end-cap restaurants. The future is finally here at Chipotle today, and tomorrow should get even better. 

There are risks that come with investing in restaurant stocks, but the climate has never been kinder, given the buoyant economy and the delivery apps that are taking on the fulfillment challenge of online orders. Digital sales will decelerate, but they should continue growing at a faster pace than in-store purchases.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.