Chipotle (NYSE:CMG) handled the challenges brought on by the coronavirus pandemic well in 2020. When it realized it would need to shut down in-person dining, it quickly shifted focus to meal delivery and online ordering. The adaptation mitigated some of the losses from in-person dining, and investors rewarded the company by bidding up its share price. 

The new year will bring new challenges, and Chipotle will need to adapt once again to the changing scenario. Importantly, it will be prudent if it prepares for multiple scenarios, as it is yet unknown when it will be able to operate without coronavirus-related constraints. Whether it's in-person or at home, Chipotle will try to get as many people as possible to consume its products over the next year. Here's why shareholders and potential investors can expect Chipotle to bring in more revenue one year from now. 

A burrito topped with avocados.

Image source: Getty Images.

A recipe for revenue growth

Chipotle successfully adopted digital ordering for pick-up and delivery to counter the lost revenue from in-person dining. In fact, revenue from digital orders increased by over 200% in the most recent quarter. The overwhelmingly positive response from customers gave Chipotle management the confidence to start putting in menu-price increases.

Furthermore, as more and more people are vaccinated and the total number of those infected with COVID-19 decreases substantially, the temporary increase in costs associated with the coronavirus will be eliminated. And as people feel comfortable dining in at restaurants again, the company's costs associated with food delivery will be lowered. Overall, if the pandemic fades away as the year progresses, Chipotle's profit margins will expand. And increasing revenue while expanding profit margins is a good sign for shareholders. 

When the stay-at-home orders were first issued in March of 2020, Chipotle slowed down new store expansion. In the next two quarters, it opened new locations at twice the pace it did in the quarter that ended in March. And by the end of 2021, you can expect Chipotle to add a net of 200 locations from the beginning of the year. If it can execute its growth ambitions, it would be a 7% increase from the current 2,710 restaurants in operation.

Not only will Chipotle gain an increase in revenue because of more stores in operation, its existing stores are also experiencing increases in revenue. With both engines firing for Chipotle, it may be able to achieve revenue growth in the double digits for 2021.

A burrito with a side of chips.

Image source: Getty Images.

What it could mean for investors

One year from now, Chipotle is heading toward having overall revenue that is up more than double digits, expanded profit margins, and a business firing on all cylinders as coronavirus restrictions ease along with widespread vaccinations. 

That may be why Piper Sandler analyst Nicole Miller Ragan raised her price target on Chipotle stock to $1835 from $1735 on Jan. 5. That is more than 35% above its market price as of this writing. Investors who are hungry for returns will do well by buying shares of this consumer goods stock. Still, investors must be aware that no investment is a sure thing, and Chipotle will need to operate its business during the volatile period until enough of the population gets vaccinated against the coronavirus to bring about a return to normal. 

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.