Chipotle Pre-earnings Analysis
Chipotle stock has been beaten down over the past twelve months as the company suffers from slowing growth, especially in same store sales in North America. From the years 2022-2024, Chipotle managed to report consistent revenue growth around 14%, but Q1 and Q2 of 2025 slowed to just 6.4% and 3.04% growth, leading investors to scale back on their positions and leaving the stock in “free fall,” especially after the last report, when net income also dipped, falling 4.3% YoY.
Although Chipotle remains a dominant force in the fast casual dining segment, its near term outlook is complicated by a maturing U.S. market. After years of price hikes, many consumers are turning to home cooked meals or cheaper alternatives, pressuring growth. Still, the company has a credible path back to double digit expansion if it succeeds in entering new markets. Chipotle plans to open its first locations in South Korea and Mexico in 2026, a key catalyst investors will be watching closely. However, since these openings are still more than a year away, any turnaround may unfold gradually through mid to late next year. Investors should also note that these regions remain unproven markets for Chipotle, with unique expansion costs and macroeconomic challenges that could weigh on performance.
Entering new markets takes time and comes with challenges, but the path has been proven. Industry leaders like McDonald’s, Burger King, and Pizza Hut followed a similar playbook when U.S. growth matured, achieving global scale and long term success. Chipotle is now positioning itself to follow that same trajectory…or at least hoping to.
At today’s valuation, around a 36× forward earnings multiple, the stock still trades at a premium to peers despite slowing growth. Unless the company can reignite double digit revenue and earnings expansion, further downside is possible in the short run.
All in all, Chipotle’s long term growth prospects remain intact, supported by a strong brand and international expansion. But in the short term, investors should expect continued volatility as the company transitions from a U.S. growth story to a global one. The real test will come in 2026, when its first international stores open and investors can begin assessing whether this new era of expansion can meaningfully restore growth momentum.
Option chain analysis:
Looking at its option chain, $CMG’s October 31st expiration currently reflects an implied volatility reading of 83%, which translates to about a (+/-) $3.85 move from the underlying stock by expiration. The direction largely depends on the outcome of their earnings and what’s said on the call. Earnings are scheduled for October 29th, 2025.