Chipotle: Avoid Chiptomania
Chipotle misses Q2 earnings estimates, but the restaurant concept does return to profits.
The company is seeing improving traffic trends from the Chiptopia loyalty program, but the program comes at a high cost.
The stock continues to trade at manic levels and far exceed the values of other strong restaurant concepts that don't face food safety issues.
Chipotle Mexican Grill (NYSE:CMG) remains a shell of its prior self in all ways except valuation. The company reported that Q2 earnings results missed analyst estimates, yet the stock is bouncing around in the after hours far above $400. The market is holding on to slight traffic improvements from the new loyalty program, when the reality isn't that impressive.
Read the full article on Seeking Alpha.
Disclosure: Long ZOES
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