Factors Driving Chipotle’s Valuation Multiple

Of all the available valuation multiples, we have opted for the forward PE (price-to-earnings) multiple for our analysis due to high visibility in Chipotle Mexican Grill’s (CMG) earnings. The forward PE multiple is calculated by dividing the company’s stock price by analysts’ EPS estimates for the next four quarters. The strong first-quarter earnings and SSSG (same-store sales growth) measures adopted by Chipotle’s management have driven the company’s sales.