Hungry investors aren't getting the satisfaction they need from Chipotle Mexican Grill (CMG 3.87%). The restaurant stock has fallen 36% in the past 12 months (as of Feb. 16). This is out of character for a business that was once a darling on Wall Street.
Chipotle continues to deal with softer foot traffic at its stores, which has pressured the share price. But where will this consumer discretionary stock be one year from now?
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Management will keep driving growth
The business ended last year with 4,042 company-owned stores. It plans to open 350 to 370 new locations this year. And the leadership team is standing firm on its belief that in the long run, there will be 7,000 restaurants in North America. Clearly, Chipotle is staring at a sizable runway for expansion.
This doesn't include partnerships to open stores in certain foreign markets. Chipotle had 14 stores in the Middle East at year-end. And with its various partners, it will open in Mexico, South Korea, and Singapore in 2026.
Excluding a severe recession that completely dampens consumer spending, it's almost a certainty that Chipotle will be collecting more revenue and profit in a year.
New initiatives remain a priority
Restaurant chains aren't necessarily known for being inventive. But Chipotle's management is focused on initiatives to support the company's long-term success.
One area is new menu items. The business introduced a high-protein lineup in December. And after the reintroduction of chicken al pastor this month, Chipotle plans to do three more limited-time offers in 2026. That's up from two limited-time proteins per year in the past.
The loyalty program is getting refreshed as well. Chipotle wants to expand the reach of the rewards system with a goal to target in-person guests.
There's always room to improve operations. Chipotle is investing in upgraded kitchen equipment that can save hours of prep time each day. CEO Scott Boatwright said on the fourth-quarter 2025 earnings call that "350 restaurants have the full equipment package today, and we anticipate about 2,000 by year-end."
NYSE: CMG
Key Data Points
Does Chipotle's valuation offer upside?
With the shares getting clobbered, trading 47% below their peak, investors are looking at a more compelling valuation than they might be used to. The stock can be bought right now at a price-to-earnings ratio of 31.8. That's down significantly from 51.2 exactly one year ago.
This starting valuation can introduce near-term upside should the business start getting back to solid same-store sales growth sooner rather than later. That's not a sure thing, though, as ongoing traffic pressures could remain longer than anticipated.
