Chipotle Stock Before Q4 Earnings: Buy Now or Wait for Results?

Chipotle Mexican Grill, Inc. CMG is scheduled to report fourth-quarter 2024 results on Feb 4, 2025, after the closing bell.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 8%. CMG has an impressive record of surpassing earnings expectations. It has exceeded the consensus mark in the trailing four quarters, the average surprise being 9.8%, as shown in the chart below.CMG Earnings Surprise History Image Source: Zacks Investment Research Trend in CMG’s Estimate RevisionThe Zacks Consensus Estimate for fourth-quarter earnings is pegged at 24 cents per share, indicating an improvement of 14.3% from the 21 cents reported in the year-ago quarter. The consensus estimate has been unchanged in the past 60 days.For quarterly revenues, the consensus mark is pegged at $2.85 billion, suggesting an increase of 13.4% from the year-ago quarter’s reported figure.What Our Model Unveils for CMGOur proven model predicts an earnings beat for Chipotle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.Earnings ESP: Chipotle has an Earnings ESP of +1.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Zacks Rank: The company carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Shaping Chipotle’s Q4 PerformanceChipotle's fourth-quarter 2024 performance is likely to have been aided by digital initiatives, Chipotlane add-ons and restaurant openings. The company’s investment in technology and innovation is likely to have bolstered its operations. AI-driven hiring platforms have reduced recruitment times by up to 75%, allowing managers to focus on team development and guest satisfaction.Digitization has also enhanced its delivery system. Partnerships with Uber Eats and Grubhub are attracting customers. The company has also expanded its digital capabilities into Canada. Collaboration with major third-party delivery aggregators has increased orders.Our model predicts fourth-quarter food and beverage revenues to increase 13.3% year over year to $2.83 billion. Delivery service revenues are expected to be $17.7 million, suggesting a year-over-year increase of 5.4%.Higher transactions, increased average checks and restaurant openings are likely to have driven comps growth in the to-be-reported quarter. Our model predicts year-over-year comps growth of 6.5% for the fourth quarter.Elevated costs concerning avocados and wage pressures are likely to have hurt margins in the fourth quarter. For the fourth quarter of 2024, the company anticipates inflation across the cost of sales and labor costs to be in the low-single digits.Our model predicts food, beverage and packaging costs to be $880.5 million, up 17.8% year over year. Per the model, labor costs are expected to increase 13.9% to $716.9 million. Our model predicts a restaurant-level margin of 24.6%. In fourth-quarter 2023, the company had reported a restaurant-level margin of 25.4%.Price Performance & ValuationShares of Chipotle have gained 21% in the past year compared with the Zacks Retail – Restaurants industry’s 7.4% growth. CMG has outpaced other industry players like McDonald's Corporation’s MCD 0.9% dip, Domino's Pizza, Inc.’s DPZ 0.4% rise and Yum! Brands, Inc.’s YUM 0.2% decline in the past year.CMG’s Price Performance Image Source: Zacks Investment Research From a valuation perspective, CMG is trading at a premium. The company has a forward 12-month price-to-earnings of 43.48X, significantly above the industry average.P/E (F12M) Image Source: Zacks Investment Research ConclusionChipotle's strong record of surpassing earnings estimates, combined with its growth initiatives, makes it an attractive buy ahead of its fourth-quarter earnings release. The company continues to benefit from digital advancements, including AI-driven hiring and expanded delivery partnerships, which enhance operational efficiency and customer reach.Chipotle’s ongoing expansion of Chipotlanes and restaurant openings solidify its long-term growth potential. While cost pressures are concerning, higher transactions and increased average checks are expected to drive comparable sales growth.With a solid Zacks Rank and positive Earnings ESP, the stock is well-positioned for another strong earnings performance.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report McDonald's Corporation (MCD): Free Stock Analysis Report Yum! Brands, Inc. (YUM): Free Stock Analysis Report Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report Domino's Pizza Inc (DPZ): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks