How to buy Chipotle CMG stock

I got an email today asking

How can I buy Chipotle stock?

Well, if you don’t know how to buy stock then you probably shouldn’t be. Seriously. It’s not hard, you just go to an online broker, setup an account, send them a check to start it, and buy the stock. Done.

Should you buy Chipotle CMG Stock

But regardless of whether or not you can, should you buy Chipotle stock? Well, I don’t know. I’ve written a lot about how it’s been a great year for their stock. On the other hand, stock analysts like Morgan Joseph are coming out saying it’s overpriced. The stock now trades near $80. That’s a price-to-earnings ratio (or P/E) of nearly 60. That’s, um, high. It implies a really really fast rate of growth in the next few years.

Can they grow that fast? I’d say that the market demand is still strong and unsatisfied by current offerings like local store or QDoba/Moes/Baja Fresh, and they have a large enough cash reserve to be able to accelerate the number of stores that they open each year (about $150 million), so what holds them back? Staff. Logistics. Their own internal desired rate of growth. If they grow too quickly that may start to decrease the quality of their stores. Growing fast is pretty hard. I’m not sure they can grow fast enough to justify a P/E of 60. Of course, stock advice is a tricky subject so I could be totally wrong. Who knows. Not me.

I do know I like to eat their burritos. In fact, I think I’ll go to do that right now!