I love Chipotle's (NYSE:CMG) Mexican fare. It is delicious, quick, and cheap. I also love the company. It is well-managed and profitable, and has lots of room to grow.

Chipotle operates 547 restaurants in 25 states. Management hasn't provided a specific long-term target for store openings, but it has hinted that 2,500-3,000 stores could operate domestically without saturating the market. This may even be a conservative estimate. Chipotle has 57 stores in Colorado, which has a population of fewer than 5 million people. The same ratio of stores to population implies that the U.S. could support over 3,500 Chipotle locations.

By comparison, Taco Bell, owned by Yum! Brands (NYSE:YUM), has almost 6,000 stores in the U.S., and McDonald's (NYSE:MCD), Chipotle's former parent, has almost 14,000 locations in the U.S.

Management plans to open 95-105 stores in 2007. By continuing that pace for the next five years, Chipotle could very easily double its size by the end of 2011, and the company would still have significant room to grow in the U.S. and internationally.

My only concern about this stock is the price. As I've said before, there is a big difference between a good stock and a good company. When I last wrote about Chipotle in May 2006, I liked the company, but the stock was too expensive, trading around $65 per share with a P/E of 80.

Since then, the stock has traded down to $62 per share with a P/E ratio of 54. That is still expensive compared to the restaurant industry average of 23 (according to Yahoo! Finance). However, growth has a price, and this could still be a winner based on my conservative back-of-the-envelope calculations.

Management expects long-term earnings growth of 25%. If earnings grew at that rate, Chipotle would earn $3.45 per share in 2011. At that point, the company would have a track record of outstanding growth among retail stocks. It would deserve a premium to the market, similar to Starbucks' (NASDAQ:SBUX), which trades at 42 times earnings. Therefore, Chipotle could sell for $144 per share. Purchased at today's price of $62 per share, that would represent a return of 18.5% per year.

Of course, P/E ratios are just a starting point for valuation, and Starbucks' multiple represents a significant premium to the industry. It remains to be seen if the market will give Chipotle that same respect, but it is certainly worth more due diligence.

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Fool contributor Brendan Mathews eats everything with a knife and fork. He welcomes your feedback. Brendan does not own shares in any of the companies mentioned in this article. The Motley Fool has a disclosure policy.