Chipotle Mexican Grill (CMG 0.40%) continues to unwrap a seemingly unstoppable level of growth. Obstacles that have forced many competitors to close have failed to stop this company's success.

While Chipotle has performed well on a long-term basis, the restaurant stock has sold off amid a generalized stock downturn. However, even with those declines, the underlying business appears solid, indicating that adding shares at current levels could look like a wise, long-term move.

The enduring strength of Chipotle

Chipotle has succeeded by providing healthy fast food on a mass-market level. It seeks to provide "real food," limiting itself to "53 ingredients you can pronounce." It also avoids using artificial ingredients or freezers.

This approach has engendered customer loyalty, perpetuated a rapid expansion, and helped Chipotle weather crises. The move to begin digital to-go and open drive-thru Chipotlanes in 2019 was a game changer for the business when lockdowns shut down many of its competitors. Today, these digital sales make up about 42% of its food and beverage revenue.

Moreover, amid rapid food inflation in recent months, it seems to have kept costs in check. Customers can still buy a burrito for under $10 in many cases, a factor that may help explain the company's pricing power.

Chipotle also continues its expansion at a rapid pace as the number of locations crossed the 3,000 mark in the first quarter of 2022. It added 51 restaurants in Q1 alone and plans between 235 and 250 for the year.

Additionally, the company believes it can eventually expand to about 7,000 restaurants in North America alone, and it has become more serious about expansions in the U.K. and France. Though it operates a few restaurants in Europe right now, success abroad opens the possibility that Chipotle could become a global brand on par with McDonald's or Starbucks.

Chipotle's financials

The company's financials continue to validate its strategy. In the first quarter of 2022, Chipotle reported revenue of $2 billion, a 16% increase from year-ago levels. This led to a net income of more than $158 million, 25% more than in the first quarter of 2021. Although it dealt with increases in food and labor costs, it kept operating expenses in check. Chipotle also cut its interest expenses by more than 90% and lowered its income tax expense modestly.

For 2022, it forecasts sales growth of 10% to 12%. Analysts appear to disagree as they have held to a consensus revenue increase of 17% and believe net income will surge by 26%. Hence, inflationary headwinds may not slow the company down.

But forecasts do not make Chipotle immune from fears. The stock has fallen by more than 35% from its 52-week high. Valuation may have inspired some selling as it trades for about 53 times earnings even after the decline. This is considerably more expensive than McDonald's and Starbucks, which support multiples under half of Chipotle's. Still, Chipotle has traded at a premium for years and is down from a price-earnings (P/E) ratio of more than 170 in December 2020.

Consider Chipotle during this downturn

Despite that high P/E ratio, investors who buy Chipotle stock now will likely feel happy with their purchase five years from now. Chipotle continues to open new locations at a rapid pace. Moreover, the company has figured out how to endure crises and drive considerable earnings growth despite rising prices. Such resilience probably means that investors should buy during pullbacks similar to the one we are now experiencing.