CMG, Chipotle Mexican Grill, Inc.
Chipotle Mexican Grill, Inc., a Delaware corporation, together with its subsidiaries owns and operates Chipotle Mexican Grill restaurants, which feature a relevant menu of burritos, burrito bowls, quesadillas, tacos, and salads.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, drawn from its own SEC filings. The lens to bring to the numbers below, not the answer.
- What it is
- Revenue is Food and Beverage (100%) and Delivery Service (0%).
- Situation
- Cyclical. margins collapse repeatedly across the cycle, a single year misleads; look at normalized, through-cycle earnings and the balance sheet at the trough.
- What moves the needle
- Same-store sales and unit economics. What decides it: traffic and check at existing locations, the return on each new unit, and whether the model is franchised, an asset-light royalty stream, or company-owned. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has run high across the record (median 28%, above 15% in 8 of 10 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 7% of revenue reaches owners as cash, consistently. High, durable returns can mark a moat, but whether this one is real pricing power or an accounting artifact is the judgment the 10-K is for.
No model wrote a word of this. Every line is arithmetic on the company's filings, shown in full in the sections below; the judgment is yours.
Where the money comes from
read the 10-K →Food and Beverage is 100% of revenue, so this is largely a single-line business.
- Food and Beverage100%$11.9B
- Delivery Service0%$60M
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $3.9B | $4.5B | $4.9B | $5.6B | $6.0B | $7.5B | $8.6B | $9.9B | $11.3B | $11.9B | $12.1B |
| Operating marginOp. mgn | 0.9% | 6.0% | 5.3% | 7.9% | 4.8% | 10.7% | 13.4% | 15.8% | 16.9% | 16.2% | 15.3% |
| Net incomeNet inc. | $23M | $176M | $177M | $350M | $356M | $653M | $899M | $1.2B | $1.5B | $1.5B | $1.5B |
| EPS (diluted)EPS | $0.02 | $0.13 | $0.13 | $0.25 | $0.25 | $0.47 | $0.64 | $0.89 | $1.11 | $1.14 | $1.12 |
| Owner earningsOwner earn. | $96M | $251M | $334M | $388M | $290M | $840M | $844M | $1.2B | $1.5B | $1.4B | $1.5B |
| Owner earnings marginOE mgn | 2.5% | 5.6% | 6.9% | 6.9% | 4.9% | 11.1% | 9.8% | 12.4% | 13.4% | 12.1% | 12.4% |
| ROICROIC | 2% | 15% | 22% | 28% | 21% | 44% | 45% | 47% | 50% | 60% | 65% |
| Cash & investmentsCash+inv | $543M | $509M | $677M | $881M | $1.1B | $1.1B | $899M | $1.3B | $1.4B | $1.0B | $1.1B |
| Net debt / (cash)Net debt | ($543M) | ($509M) | ($677M) | ($881M) | ($1.1B) | ($1.1B) | ($899M) | ($1.3B) | ($1.4B) | ($1.0B) | ($1.1B) |
Owner’s Scorecard
Will it survive?
- No meaningful interest burdenLittle or no interest expense reported
Little or no interest expense reported, the business isn't leaning on lenders to operate.
- Debt-freeNo interest-bearing debt reported
The business doesn't depend on lenders, the strongest position to negotiate, wait, or weather a bad year from.
- Debt, net of cash +$1.0BNet cash, debt-freeCash $351M + ST investments $699M − debt $0
Cash and short-term investments exceed every dollar of debt by $1.0B, on net the company owes nothing, and can act from strength when others can't. It also holds $102M in longer-dated marketable securities; counting those, it sits at net cash of $1.2B. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- Not enough data
The filing data didn't include the inputs for this check.
Is it a good business?
- ExceptionalNOPAT $1.5B ÷ invested capital $2.5B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- SolidOwner Earnings $1.4B = operating cash $2.1B − capex $666M
What an owner could take out without starving the business. That's 12% of revenue. Treating stock comp as the real expense it is (less $120M of SBC) leaves $1.3B. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Cash-backedCash from ops $2.1B ÷ net income $1.5B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returns most of itDividends + buybacks $2.4B ÷ Owner Earnings $1.4B
Of $1.4B Owner Earnings, $2.4B (168%) went back to shareholders, $0 dividends, $2.4B buybacks. Net of $120M stock comp, the real buyback was about $2.3B. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 1.84×ExpandingCapex $666M ÷ depreciation $361M
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2016–2025
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 10 of 10
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 7 of 7 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 1% (FY2016) → 16% (FY2025)
Margins widened over the record, pricing power intact or improving.
- Reinvestment, incremental ROIC 97%
Every extra dollar the company reinvested earned a high return, it is still compounding, not coasting on an old moat.
- Owner earnings growth +27%/yr
Free cash to owners grew about 27% a year over the record.
- Worst year 2016 · 0.9% op. margin
Stayed profitable even in its hardest year, the resilience that survives recessions.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2016–2025
Over the record, the business generated $11.4B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.
- Reinvested$4.2B · 37%
- Buybacks$6.8B · 60%
- Retained (debt / cash)$382M · 3%
It reinvested $4.2B (37%) back into the business and returned $6.8B (60%) to owners, $0 in dividends, $6.8B in buybacks.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Management & pay
Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- Stock-based compensation$120M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 6% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Graham’s defensive-investor test
4 of 6 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $11.9B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 1.23×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt PassDebt ≤ working capital · $0 vs $279M WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability PassA profit every year (10-yr record) · no losses
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · none paid
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth PassEarnings +33% over the record · +1044%
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $1.14/share and book value $2.11/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFA price is the one input we don't pull, you bring it. Type today's close (read it off any broker or quote site) and see the owner-earnings growth you'd have to believe to justify it, set beside what Chipotle Mexican Grill, Inc. has actually delivered. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
Graham capped the multiple at 15×; Buffett and Munger let that rule go, a wonderful business can deserve 50× if the thesis holds. Read it as the bargain-hunter's floor, not a ceiling on good sense.
The discount rate is your interest rate, what a dollar years from now is worth today, anchored to the long-term Treasury yield (~4–5% today, plus whatever premium you want for risk). Drag it toward the risk-free rate and watch how much growth the price suddenly “needs”: interest rates are gravity on valuations.
Owner earnings $1.5B on 1302M diluted shares; net cash $1.1B. This is a lens, not a price target, it says what you'd have to believe, not what the company is worth, and it runs on one year of (noisy) owner earnings at assumptions you can see and change.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Pricing power & competitionRisk Factors
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“The restaurant industry is highly competitive on factors such as taste, price, food quality and selection, customer service, brand reputation, digital engagement, advertising and promotional initiatives, and the location, attractiveness and maintenance of restaurants.”
From the recordOperating margin15.3% now (TTM), off a 16.9% peak (FY2024) - Supplier & input dependenceRisk Factors
A choke point upstream. A sole or limited supplier can dictate terms, and a single shortage can stop the line.
“In addition, we have a limited number of suppliers for some of our ingredients, including lemon and lime juice, tomatoes and adobo.”
A judgment, not a number, weigh it against the filing yourself. - Concentrated dependenceRisk Factors
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“Our ability to effectively manage our business and coordinate the procurement, production, distribution, safety and sale of our products depends significantly on the consistent availability, reliability and security of these systems.”
From the recordOwner-earnings margin at stake (TTM)12% - Debt terms & refinancingMD&A
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“As of December 31, 2025, we had $500.0 million of undrawn borrowing capacity under a revolving credit facility.”
From the recordBalance sheet (TTM)+$1.0B net cash, debt-free · no real interest burden - Litigation & contingenciesRisk Factors
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“We are party to multiple lawsuits and governmental audits alleging violations of federal and state employment laws, including wage and hour and predictive scheduling claims, and we could be involved in similar or even more significant litigation and legal proceedings in the future.”
A judgment, not a number, weigh it against the filing yourself. - Cyclicality & demandRisk Factors
How the business behaves when the economy turns. A cyclical earns its keep across the whole cycle, not at the peak.
“A prolonged economic downturn or slow recovery may reduce consumer spending, leading to lower demand or shifts to lower-priced options.”
From the recordWorst year on record0.9% operating margin (FY2016) - Regulation & policyMD&A
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“These decreases were partially offset by 0.4% of inflation, primarily beef and chicken, and a 0.2% impact from tariffs enacted in 2025.”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “The increase was due to the impact from several items, primarily 0.5% of higher marketing and promotional activities, 0.2% of lower sales volumes, and 0.2% of inflation in natural gas and electricity.”
- “We estimate that the tariffs enacted in 2025 will impact food, beverage and packaging costs by about 15 basis points on an ongoing basis.”
- “These decreases were partially offset by 0.4% of inflation, primarily beef and chicken, and a 0.2% impact from tariffs enacted in 2025.”
- “The decrease was primarily due to a 0.6% benefit from menu price increases and, to a lesser extent, cost of sales efficiencies.”
- “Increases could be triggered by federal, state and local laws governing matters such as minimum wages, meal and rest breaks and changes to eligibility for overtime pay; regulations regarding scheduling and benefits; increased health care and workers' compensation insurance costs; and higher wages an…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Restaurants
The same industry, side by side on owner economics, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| SBUXStarbucks Corporation | $37.2B | 77% | 7.9% | 143% | 7% |
| MCDMcdonald’s Corporation | $26.9B | — | 46.1% | 26% | 27% |
| DRIDarden Restaurants, Inc. | $12.1B | 59% | 11.3% | 29% | — |
| CMGChipotle Mexican Grill, Inc. | $11.9B | — | 16.2% | 60% | 12% |
| YUMYum! Brands, Inc. | $8.2B | 70% | 31.3% | 49% | 20% |