Why Chipotle Stock Collapsed Last Year

• Chipotle's same-store income are declining, starring to a diminution successful the banal price.

• Its margins are moving successful the incorrect direction, with imaginable limits connected the fig of stores it tin unfastened successful the future.

• The banal inactive trades astatine a premium valuation.

• 10 stocks we similar amended than Chipotle Mexican Grill ›

Shares of Chipotle (NYSE: CMG) fell 38.6% past year, according to information from S&P Global Market Intelligence. The fast-casual person successful Mexican nutrient had mediocre postulation and income figures past calendar year, starring investors to merchantability the stock. With implicit 4,000 locations successful North America, determination are worries that the marque is facing marketplace saturation, which volition inhibit maturation successful the coming years.

This is wherefore Chipotle banal fell successful 2025. But is it a buy-the-dip campaigner for 2026?

For years, investors could stake connected dependable maturation astatine Chipotle. It would unfastened caller stores and turn gross astatine existing locations, fueling cumulative gross maturation of 178% implicit the past 10 years.

In 2025, the institution kept opening caller locations. However, it saw a crisp reversal successful its gross maturation astatine existing locations, different known arsenic same-store income growth. For the archetypal 3 quarters of 2025, same-store income maturation was 0%, 4%, and 0% for Chipotle compared to 2024, which is good beneath the complaint of ostentation connected input costs for restaurants.

This is an important equilibrium for a palmy edifice to have. If input costs (labor and food) are increasing faster than your same-store sales, nett borderline volition spell down. We saw this hap with Chipotle, wherever operating borderline fell to 16.4% implicit the past 12 months, down from a precocious of 17%. If same-store income maturation remains weak, Chipotle's operating borderline volition proceed to compress.

In 2026, Chipotle's stock terms has begun to recover. It is up 8.5% year-to-date (YTD). Looking astatine the stock's valuation, it has a price-to-earnings ratio (P/E) of 36, which is little than Chipotle's mean humanities net aggregate but higher than the existent S&P 500 mean of 31.

Despite the stock's drawdown, Chipotle does not look inexpensive close now. It should beryllium capable to dilatory turn its store number successful North America portion exploring caller markets astir the globe, specified arsenic Europe, the Middle East, and Mexico (where it is readying its archetypal location), but the cardinal interest is same-store income growth. Traffic to Chipotle locations is anemic close now, with nary signs of a reversal. This is simply a interest due to the fact that anemic same-store income maturation volition not lone wounded Chipotle's gross imaginable but besides interaction its nett margin, a double-whammy to net per stock (EPS) growth.