Chipotle Mexican Grille
There are few reasons why chipotle P/E to decline, one of the major reason was recent widespread of E. Coli outbreak from food, uncertainly of each store to achieve restaurant sales change in consumer preferences or decrease in spending, changing menu prices, impact on competition, plans to expansion sites, cost of materials(food supplies). My consideration for P/E would be what’s shown on given data from company snapshot which is 30.7. The reason I chose this is by analyzing past financial statements revenue has grown about 30% from 2010 to 2015, EPS shows 15.36 which is not the most effect way to measure a its company but popularly of Chipotle which make sense. Comparing to consumer/fast food industry even thou Chipotle does not consider self as fast food, Chipotle have ability to grow fast due to customer base and loyalty and also consider as health option among fast food market. When it comes to financial strength Chipotle has more cash than liability, which can be healthy help chipotle sustain itself in the face of any turmoil and possible to make a stock buyback. Chipotle has consistently retained profit, which could Chipotle in strong position to invest for the future, by expanding to territory, new equipment, investing in R&D.
1,122
1,324
1,563
1,844
Cap Ex
Discount @
11.0%
Sum of PVs
Terminal value= EV/EBITDA = 12x
Assume EBITDA in 2020 = CFFO
Terminal Value =
PV of Terminal Value=
Intrinsic Value=