Here's What History Says Q4 Will Bring for Chipotle (CMG) Stock
Key Points
During the fourth quarters of 2020 and 2023, Chipotle’s stock posted double-digit returns.
The leadership team is investing in various initiatives to drive customer interest and spark growth.
While the valuation is historically cheap, investors would be wise to temper expectations.
- Motley Fool Issues Rare "Total Conviction" Buy Alert ›
Chipotle Mexican Grill (NYSE: CMG) is a restaurant industry pioneer. It popularized the fast-casual dining concept. The focus on fresh, customizable food, fast service, and reasonable prices has made the business a household name.
Shares have been feeling the heat. As of Oct. 14, they have fallen 18% in 2026 and are 56% off their record from June 2024. The rest of the year may tell a different story.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Here's what history says the fourth quarter will bring for this restaurant stock.
Image source: The Motley Fool.
Past trends reveal mixed performance
This decade, the performance of Chipotle's shares has been up and down in Q4. In the fourth quarters of 2021, 2022, 2024, and 2025, the stock fell by single digits. However, in 2020 (+12%) and 2023 (+25%), shares posted double-digit returns. So far this month, they have dropped by over 4%. Q4 2026 is off to a slow start.
At the same time, the S&P 500 index has climbed almost 1%. The positive view is that by the end of this year, Chipotle will end Q4 with a strong gain. This will continue the every-three-year streak, as the fourth quarters of 2020 and 2023 saw winning results.
Navigating a weaker industry
As mentioned, Chipotle shares have been cut by more than half since the summer of 2024. At that time, it was clear that the stock was extremely expensive. It traded at a price-to-earnings (P/E) ratio of 73.2. Expectations were sky-high. That's not surprising, given that net income surged 183% from first-quarter 2021 to Q1 2024. The business was hitting its stride.
In recent years, Chipotle has been rattled by weaker conditions in the industry. The fast-casual segment, and the overall restaurant sector, have seen consumers pull back, particularly among households making less than $100,000 in annual income.
Furthermore, making food at home has become a more cost-conscious decision. According to U.S. Department of Agriculture data from 2025, the value proposition of buying groceries widened compared to eating out.
In 2025, Chipotle reported a rare same-store sales (SSS) decline of 1.7%. That improved to a gain of 0.5% in Q1 and 2.2% in the second quarter (ended June 30) of this year. The leadership team expects SSS to rise in the low single digits for the full year.
Profitability has come under pressure. Costs have increased due to labor and food inflation. The unit-level operating margin was 25.2% in the most recent quarter. That's down 220 basis points from the same period last year.
In order to right the ship and position the business for faster growth, Chipotle is investing in menu enhancements, the in-store dining experience, digital reach, and marketing efforts to drive foot traffic. Capital expenditures were $397.6 billion through the first six months of 2026, up 30% year over year. This hits free cash flow directly.
The stock might be cheap for a reason
It can be hard for Chipotle to attract investor interest at a time when it seems everyone is enamored by artificial intelligence stocks. These enterprises can promise faster growth and bigger gains. The Tex-Mex chain has to compete with that.
For what it's worth, Chipotle's valuation has become more attractive. The stock trades at a P/E ratio of 28.2, which is near a 10-year low. Expectations have fallen due to the company's softer financial results.
This is a high-quality business, though. Its brand is arguably the strongest in the fast-casual space. Its 4,186 company-owned stores give it tremendous scale. It keeps growing, with 350 to 370 net new openings scheduled for this year. Profits are consistent; the average quarterly operating margin in the past five years was 15.8%.
That combination should keep Chipotle on your radar. However, the future might not be as robust as the past was. Consensus analyst forecasts call for earnings per share to grow at just 8.6% per year from 2025 to 2028. This is significantly below the 21.2% annualized pace of the previous three years. Investors need to temper their expectations.
Should you buy stock in Chipotle Mexican Grill right now?
Before you buy stock in Chipotle Mexican Grill, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chipotle Mexican Grill wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $380,579!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,359,789!*
Now, it’s worth noting Stock Advisor’s total average return is 931% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of October 16, 2026.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool recommends the following options: short December 2026 $38 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
Recommended Articles
