Chipotle Mexican Grill (CMG 3.81%) has a lot of work to do to win back the hearts of the investment community. Shares have fallen 46% from their all-time high in June 2024 (as of March 4). Besides late 2025, they now trade at the same level as they did in October 2023. The market has lost its appetite for this restaurant stock.
Contrarian investors are ready to take action. Could investing $1,000 in Chipotle make you richer?
Image source: The Motley Fool.
The K-shaped economy is taking its toll
Based on ongoing U.S. GDP growth, we're not in a situation that warrants preparing for a recession. However, there is definitely a notable portion of the population that is feeling the pressure. After all, consumer confidence in the U.S. recently hit a 12-year low.
We're in what looks like a K-shaped economy. Affluent consumers are generally doing well, but might still be discerning with their spending. At the same time, low-income households struggle with higher costs across the board.
This unfavorable setup is finally starting to take its toll on Chipotle's financials. The company reported same-store sales growth of 7.9% in 2023 and 7.4% in 2024. But this key performance metric declined 1.7% last year, as foot traffic fell.
Investors aren't used to seeing the popular Tex-Mex chain struggle like this. It's worth mentioning that the retail sector overall is experiencing something similar.
Chipotle five years from now
The best investors are able to consider a business' past performance while keeping their attention on how things will look in the future. It's not hard to be optimistic about Chipotle five years from now, for example, which is what really matters for long-term market participants.
This company isn't a fad. It has the scale and brand recognition that makes it a leader in the extremely competitive restaurant industry. That supports its durability.
What's more, there is significant growth potential going forward. Despite weaker financial results lately, Chipotle opened 334 net new company-owned restaurants in 2025. It plans to add 350 to 370 in 2026. And the management team still firmly believes that the total opportunity in the U.S. and Canada is 7,000 stores, much higher than the current total of 4,042.
A larger base of restaurants lays the foundation for rising profits. And that can provide a fundamental tailwind for investors.
NYSE: CMG
Key Data Points
Managing expectations is important
It's been a while since Chipotle shares have gone on sale. Now is the time for investors to consider buying, as the price-to-earnings ratio of 32.1 is close to a 10-year low. This business is deserving of a $1,000 allocation.
But even if the stock doubles in five years, a wonderful outcome, Chipotle isn't going to make you rich.
