Chipotle holy smokers guys another super popular stock has fallen big-time guys we're talking Chipotle today this stock was down $50 a share at one point today yes you heard me right $50 a share yesterday we talked about the AMD stock falling today it's all about Chipotle and by the way I robot also fell not as popular as Chipotle and AMD but also still fairly popular stock based upon the comments I get guys so let's look at this Chipotle and why it fell so much so as we see here as of taking the screenshot it was down about forty seven dollars but once again at one point today was down over $50 a share down well over fifteen percent at one point now we look here this stock has not been this low for five years the last time the stock was this low was literally five years ago we're talking about a long time ago guys so why did this happen let's look at these earnings here they reported earnings now as far as the the top numbers here it looks like this would have been in great earnings maybe the stock would explode on this right Chipotle third quarter diluted EPS up increased one hundred and fifty five percent on eight point eight percent revenue growth so if all you looked at was those numbers right there you would think this stock is is gonna go up massively these are unreal numbers because those numbers are on real numbers right 155 percent growth in EPS eight point yeah eight point eight percent revenue growth really awesome numbers but then when you dig a little deeper you find it's not quite what it seems guys so let's look at all these numbers here so revenue as I said increased eight point eight percent to 1.13 billion here's a bad number here comparable restaurant sales increased one percent one percent that is not very good guys that is not very good now it's good that they got some kind of growth but a 1% number that's really bad especially for a company like Chipotle remember it was not that long ago before the whole e.coli situation and norovirus all that stuff happened right Chipotle used to grow calm store sales at six to ten percent pretty consistently guys to be at one percent now is just pathetic it's just pathetic guys restaurant level operating margin did increase to sixteen point one sent from 14.1% net income was nineteen point six million which is not that great but it's not that bad if we look here Chipotle you know this is a company it has a market cap of close to eight billion dollars but they do have a forward p/e of twenty seven right now okay so you know it's not a super high forward p/e but obviously based upon what kind of net income they had this particular quarter they need to increase that drastically if they're gonna hit that forward P next year guys and something else to take into account here is you know a twenty seven is still a bit high if you're only going to have comp store sales up one percent okay twenty seven you would maybe expect more like two to three percent type comp store sales numbers so a twenty seven p/e it's fairly low for Chipotle overall but consider how much Chipotle's growth has stalled it may not be as cheap as it seems here so let's look what the CEO actually had to say here he said we continue to make important progress to improve our the guest experience at our restaurants during the quarter said Steve ELLs founder chairman CEO of Chipotle our strategic initiatives in operations in innovating our digital sales platform new menu introductions and marketing the brand are starting to take hold despite several unusual impacts during the quarter which basically had to do with the Hurricanes and whatnot mostly including the impact of the hurricanes all that regard could just said that we maintain our focus and saw some encouraging signs our leadership remain focus on setting the foundation for future growth and we are confident in our team's ability to deliver against those plans okay that's what he had to say here now if we look at the outlook for the rest of the year for full year 2017 management expects store sales to be around six point five percent but of course they've weakened substantially recently right new restaurant opening slightly below the low end or a previously disclosed range of 195 to 210 an estimated effective full-year tax rate of approximately thirty nine point one percent for 2018 management expects a 130 to 150 new restaurant openings that stuff very many guys when you take into account this past year was 195 to 210 so they're actually you're opening far less stores and that makes a bigger impact on a company then you can even really realize because you understand Tripoli has they increased more stores it becomes a bigger and bigger company right so in new stores coming online or it's harder and harder to move the needle right if you have one store and you open up a second store you could potentially double your revenue right but when you already got several thousand stores and you're gonna open let's say 130 even if those stores do phenomenal it's gonna make very little impact on your revenue base and on your net income and whatnot you really have to be increasing you know if you've got 2,000 some stores open which I believe Chipotle does right you need to really be having 200 plus stores open a year to really start making an impact really more toward 300 at that point okay so let's look at this here guys so Kramer he says Jim Kramer of CNBC probably the most popular guy on the stock market other than maybe Warren Buffett right he's been on CNBC for like over a decade now Kramer he says Chipotle stock is overpriced and should go lower despite Chipotle's efforts the stock is overpriced and should go lower see NBC's Jim Cramer says I want to say it is a work in progress but I'm going to say it is overpriced stop Kramer says all right then if we look here this is a this is pretty crazy here this is affecting a lot of people right when shares of Chipotle peaked on August 5th 2015 four top executives held stock appreciation rights worth 225 million dollars guys four guys 225 million now those those are worthless those are worthless guys worthless they were worth 225 million now they're worth nothing guys another person has been hit by this whole deals Bill Ackman Bill Ackman can't catch a break on a triple a mexican shares they talk about avocado praises hurricanes all that after terrible results late Thursday sending shares tumbling Ackman lost around a hundred and twenty million dollars on a stake overnight one hundred and twenty million overnight guys but you know who's hurt the worst of all me me no not a huge amount of money here but pretty fair so here's what I was thinking a year and a half ago I was so close to doing two thousand dollars worth of put options at a four hundred dollar strike price okay and these were gonna expire in January 2018 right I was gonna have to pay $20 per contract for those okay $20 currently those are trading around a hundred and twenty two dollars guys so we're talking about a six-fold increase and once again I was only at a risk $2,000 so it only would have been a $10,000 game I did send that money into wind shares at that particular time because I was gonna do it in the Chipotle I was like so holy still a lot of people that were kind of like throwing off because this was after the the original ecoli came out and I was like this is gonna hurt them bad and a lot of people were just kind of like brushing it off and whatnot and I was like do I really want to risk 2,000 this I end up putting in a win wins done good but certainly not even close we're talking about six-fold increase I would've made and these put options there guys so it's just like ah just ten thousand dollars just that's not there so anyways Chipotle is this a stock I would buy I would say I was getting pretty damn close to me buying these shares now it's fallen so much so fast and now we're starting to get to a p/e that's somewhat realistic we're at a forward of somewhere around 27 okay 27 still display everything that's happened with this company still one of the strongest brands in the restaurant game I know I'm amazed they've done actually a really good job of that it means to have us everything that's Chipotle's gone through and a Steve is still even have comp store sales going up right to still even have revenue going up that's that's a big thing guys like I can't explain how big that is and how big of an accomplishment management has achieved by and of course you can say well management shouldn't allowed this to happen in the first place that's true but to get the company back on the right tracks as far as getting back to growth in the amount of time they've done it it's pretty remarkable I I didn't even think that was possible to be completely honest guys I mean usually ecoli tape situation norovirus those things are like death to you know a fast food place right they're usually just I remember what happened with jack-in-the-box back in the day right I fear there's a long long time ago if you remember what happened with jack-in-the-box is my to be 20 years ago with something jack-in-the-box was a growing chain that was growing really fast and doing really well and then they have a ecoli situations people died from it and that furnished jack-in-the-box brand for the next decade or two guys Chipotle's been able to just bounce back from this like like unbelievable so it is a stock that would probably by some point in time I'm just not sure it's quite at this prices here maybe it's got a little more shoes to drop I know the short sellers are still short in the heck out of this one maybe it falls a little bit more and then I get in but just just watch out for it maybe something I buy at some point in time guys so thank you for watching and have a great day [Applause] [Applause] [Applause] [Applause] you


  • Financial Education

    I want to hear opinions on ChiPPPOOOTTTLLLEEE! Leave a comment if you are buying their stock, will buy if it goes lower, or would not buy regardless?

  • Philip Tessaro

    I am older than you, and I can tell you that you get only a paycheck from employers and nothing else…to really enjoy things of this country, one must work for oneself… get a crumb every now and then to line someone else's pockets is ludicrous….knowledge is power….going to get three books that you recommended….

  • Philip Tessaro

    If you are not a multimillionaire by 40, something is very very very wrong…… content and transparency….I have learned that persistentance pays off….change nothing with your program…

  • Keeyan

    If there is a stock you are interested in long term which is doing well financially and you decide to buy it but their quarterly revenue report is coming up, do you think it's best to buy or wait until the report and risk the price going up or potentially going down? Assuming you investing for the long term and don't think a slightly good/bad quarter will make any long term difference.

  • Keeyan

    It's quite unhelpful saying it fell $50. Unless you know the stock that doesn't help much. If Alphabet drops $50 its bad but not terrible. If Microsoft drops $50 that's catastrophic. It would be a lot more informative if you tell us the percentage drop. (yes I know I can just Google it or wait for you to explain but it would just be easier for you to say it)

  • Aaron Shaefer

    I just don't get irbt. I must be missing something.

    Trailing 12 month PE is 29.9 (63.38/2.12). Stockholders equity 456.49 Million with market cap of 1.75 Billion. Q4 Year over year is 33% revenue growth.

    What am I missing and stock tanks 13% Wednesday and another 3% today. Help me out here.

  • David Fullard

    haha im still watching……dont like shares that dont pay dividends! i just cant see the point, love divi!


    Bill Ackman is having another bad day! I have just gone ALL IN with my no.1 stock. check it out on my channel. click on the gold coin.

  • Kathy volpe-schaffer

    Jeremy, please do a talk on MO and PM. And how do you think they’ll perform if marijuana ever becomes legal -federally?

  • Carmelle Jean-Paul

    Jeremy, I absolutely would not buy Chipotle and don’t see why you would as well! None of the numbers look right for it and i think it is extremely overvalued. I agree with someone else who posted they don’t see the appeal as there is nothing that stands out about the company (other than the food itself) that says to buy. There are better uses for your money ?

  • Mustafa Alsadiq

    I see the stock going down for 2 quarters at least then recovering little by little once people start forgetting about the virus outbreaks. in one year and a half if the market doesn't crash i'm buying in. there are talks about China trying to crash the U.S dollar and so far I see them making very smart political steps. dealing with their own currency with Russia, earning the contract with the Saudis to build the new city between Saudi, Jordan, and Egypt which they plan to be a tech and commerce hub. The U.S will be screwed really soon i think

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