This Thursday, Chipotle Mexican Grill (CMG 0.17%) is due to report earnings for its fourth quarter as well as for the company's full fiscal year. Leading up to the company's earnings release, shareholders appear to be mildly pessimistic, as shown by the 10.5% decline the stock has seen from its 52-week high. This represents quite a pullback, but the company's market cap still stands 64.7% above its 52-week low.

Heading into earnings, is it possible that now might be a prime buying opportunity, or are concerns about the company's profitability for the quarter being justifiably reflected in the company's falling share price?

Mr. Market has high expectations
For the quarter, Mr. Market expects Chipotle to report revenue of $826.4 million. If analysts are correct, revenue will have risen 18.2% compared to the $699.2 million that management reported the same quarter a year earlier. At the expected level, the company's results would bring revenue for 2013 to $3.2 billion, 17.2% higher than the $2.7 billion it saw in 2012.

At first glance, such a high expected growth rate may come across as a typo, but that's not the case. During the past few years, revenue at Chipotle has grown rapidly, with aggregate growth between 2010 and 2012 clocking in at 48.8% while earnings per share have risen by 55.1%. But Chipotle isn't the only fish in the sea that's been fattening up. Over the same time frame, rival Panera Bread (PNRA) saw its revenue rise an impressive 38.1% and its earnings per share increase a jaw-dropping 62.7%.

Both companies have seen their top lines rise significantly as a result of two improving inputs; rising comparable-store sales and greater restaurant count. Chipotle, for instance, has seen its comparable-store sales increase by 30.3% between 2010 and 2012 while its restaurant count has risen by 30.1%. Similarly, Panera's comparable-store sales grew 20.1% over the same time while its restaurant count rose 13.7%.

In addition to rising revenue, analysts expect Chipotle's EPS to increase as well. For the quarter, Mr. Market anticipates earnings of $2.52 per share. This would represent a 29.2% jump compared to the $1.95 per share the company reported in the fourth quarter of 2012. If analysts are correct, this will mean full-year earnings per share of $10.47, 19.7% higher than the $8.75 per share the company reported for 2012.

The discrepancy between Chipotle's revenue growth and earnings-per-share growth is primary attributable to a reduction in costs. For instance, between 2011 and 2012, Chipotle saw a marginal improvement in its cost structure, with cost of revenue falling from 74% of sales to 72.9%.

But can Chipotle stay competitive in the face of rising competition?
As we can see, Chipotle has a history of sky-high growth. While this is all fine and dandy, the question remains as to whether or not the business will be able to continue its growth in an increasingly competitive environment. Based on the company's current price/earnings ratio (using its 2013 estimated earnings per share) of 47, it looks like Mr. Market has a great deal of confidence in management's ability to grow the business. But is this confidence misplaced?

While the past three years have been accompanied by tremendous growth, so too have the company's rivals demonstrated their ability to grow. In addition to Panera, both Buffalo Wild Wings (BWLD) and Texas Roadhouse (TXRH 0.72%) have experienced attractive growth rates over this time frame.

Buffalo Wild Wings, for instance, saw its revenue rise by 69.7% from 2010 through 2012, outpacing both Chipotle and Panera. According to the company's most recent annual report, growth has come about from the same source as industry peers. Between 2010 and 2012, the company saw a 21.7% rise in its restaurant count as well as a 13.8% rise in comparable-store sales.

Unlike Chipotle and Panera, though, Buffalo Wild Wings has had a hard time improving its bottom line. Over the same time frame, the company's earnings per share have increased only 45.7%. For the most part, the disparity between the company's revenue and earnings-per-share growth can be chalked up to rising costs relative to sales. Between 2010 and 2012, the company's cost of goods sold rose from 73.9% of sales to 75.8%, largely driven by a 24.7% jump in the price of wings per pound. 

Just as in the case of its peers, Texas Roadhouse has shown that it, too, is capable of growth. Over the past three fiscal years, the business has racked up a revenue growth rate of 25.7%. In part, this rise in revenue has been attributed to a 12.4% increase in comparable-store sales but can also be attributed to a 13.6% jump in restaurant count.

Similar to both Chipotle and Panera, Texas Roadhouse has managed to grow earnings per share at an attractive rate alongside revenue. Between 2010 and 2012, the company's earnings per share rose 25%, just slightly slower than revenue. The primary driver behind Texas Roadhouse's earnings per share keeping up with revenue has been a 22.1% rise in net income, negatively affected by higher costs, and a 2% reduction in shares outstanding.

Foolish takeaway
Heading into earnings, Mr. Market has high expectations for Chipotle. Historically, the business has been more than capable of growing at a fast pace, but as competition from Panera, Buffalo Wild Wings, Texas Roadhouse, and other restaurants continues to rise, Chipotle's task of pleasing investors will become more difficult.

Rather than focusing on earnings this quarter though, the Foolish investor should keep in mind that Chipotle is, irrespective of what earnings say, a thriving and profitable enterprise. True, the business does trade at a high earnings multiple, but if the company can maintain a nice growth rate and improvements in its bottom line over time, the opportunity can be a nice one that could pay off handsomely.