While it's definitely not easy in practice, investors willing to think in a contrarian manner can certainly find valuable ideas for where to park their capital. For instance, there's a well-known consumer discretionary stock -- which, as of March 25, is down an alarming 53% from its peak in June 2024 -- that presents an interesting situation.
Patient investors should take a closer look. There's one obvious reason this beaten-down stock can skyrocket over the next five years.
Image source: The Motley Fool.
Macro headwinds are taking their toll
Things haven't been going well recently for Chipotle Mexican Grill (CMG 2.61%). The dominant fast-casual restaurant chain, which was once a monster stock (shares jumped 368% in the five years leading up to their record), is dealing with the adverse economy. Weakness among lower-income households at a time of pressured consumer confidence, worries about the cost of living, and general economic uncertainty are all hurting the company's financial performance.
Chipotle reported a same-store sales (comps) decline of 1.7% in 2025, a surprise from an otherwise steady business. Transaction counts fell 2.9% last year, and foot traffic has been disappointing in recent quarters.
NYSE: CMG
Key Data Points
Management is introducing more limited-time menu items to drive visits. Looking ahead through 2026, though, it believes comps will be flat this year.
It's not all bad news. Softer foot traffic is hurting the broader restaurant sector. So this isn't a problem that's unique to Chipotle, as people across the board are prioritizing value with their purchasing decisions.
Growth is still a key part of the thesis
It can be challenging to want to buy shares of a struggling company, but that's where the opportunities can be for investors who can look to the next five years. Growth is the main reason that Chipotle's stock price can soar between now and 2031.
Management isn't taking its foot off the gas pedal. It opened 334 net new locations in 2025 and ended last year with 4,042 company-owned stores. In 2026, the plan is to open 350 to 370 net new restaurants. Over the long run, the target is set at 7,000 stores in North America. These figures don't include the business' partnership-led expansion in the Middle East, Mexico, Singapore, and South Korea.
Clearly, the company still sees a ton of potential. With a much larger physical footprint in the future, Chipotle is sure to generate higher revenue and profit, especially since the economy won't stay like this forever. And now that the stock trades at a more inviting price-to-earnings ratio of 28.5, the upside for patient investors could be significant.
