Chipotle Mexican Grill, Inc., together with its subsidiaries, owns and operates Chipotle Mexican Grill restaurants. It sells food and beverages through offering burritos, burrito bowls, quesadillas, tacos, and salads. The company also provides delivery and related services its app and website. It has operations in the United States, Canada, France, Germany, and the United Kingdom. Chipotle Mexican Grill, Inc. was founded in 1993 and is headquartered in Newport Beach, California.

Chipotle Mexican Grill, Inc.

Chipotle Mexican Grill, Inc. CMG is slated to release fourth-quarter 2025 results on Feb. 3, after the closing bell.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 3.6%. CMG’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.6%, as shown in the chart below.
Image Source: Zacks Investment Research
CMG’s Q4 Estimate Revisions
The Zacks Consensus Estimate for fourth-quarter earnings per share (EPS) has been unchanged at 24 cents in the past 30 days. The projected figure indicates a 4% decline from the year-ago reported EPS of 25 cents. The consensus mark for revenues is pegged at $2.99 billion, implying 5% year-over-year growth.
What the Zacks Model Unveils for CMG
Our proven model does not conclusively predict an earnings beat for CMG this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
CMG’s Earnings ESP: Chipotle currently has an Earnings ESP of -2.25%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank of CMG: The company carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Influencing CMG’s Q4 Performance
Chipotle’s fourth-quarter 2025 revenues are likely to have been supported by continued momentum from menu innovation and limited-time offerings that carried into the quarter. Management highlighted that carne asada and the Red Chimichurri sauce generated a clear step-up in transactions and increased trial, with sauces in particular proving effective at attracting younger consumers and incremental visits. These offerings not only lifted average check through premium proteins but also encouraged repeat purchases, as data shows guests who buy LTOs tend to increase frequency and spend over time. This innovation-led demand likely helped cushion the impact of broader consumer pullbacks during fourth-quarter 2025.
Another key revenue tailwind was elevated marketing and promotional activity tied to loyalty and digital engagement. Chipotle accelerated marketing spend to around 3% of sales, using campaigns such as Chipotle IQ, Freepotle and rewards-based promotions to reengage pressured cohorts. Management noted that loyalty comps outperformed non-loyalty trends, suggesting these efforts helped drive incremental transactions even as underlying traffic remained soft. The continued emphasis on digital engagement and rewards activation is likely to have supported sales volumes through fourth-quarter 2025, particularly among younger and lower-frequency guests.
Unit growth and operational initiatives are also likely to have contributed to top-line resilience. Chipotle continued opening new restaurants at a strong pace, with new units delivering high initial productivity and outperforming the existing base. In parallel, early benefits from the rollout of high-efficiency equipment packages improved throughput, food quality and guest satisfaction in pilot locations. While still in early innings, these operational improvements are likely to have helped maximize sales during peak periods and supported revenue generation in fourth-quarter 2025.
Our model predicts Food and Beverage as well as Delivery Service revenues to increase 5.6% and 0.8% year over year, respectively.
Despite revenue supports, fourth-quarter 2025 earnings are likely to have been pressured by higher costs and margin headwinds. Management flagged a full-quarter impact of the premium carne asada LTO, rising beef prices and accelerating inflation driven by tariffs, all of which are expected to have pushed cost of sales higher in fourth-quarter 2025. At the same time, Chipotle chose not to fully offset inflation with pricing, prioritizing value for consumers.
Elevated labor costs from wage inflation, sustained marketing spend and higher G&A tied to growth investments might have further weighed on profitability, limiting earnings leverage despite ongoing sales growth. Our models predict restaurant operating costs to increase 6.4% year over year to $2,227.8 million.
Price Performance & Valuation of CMG
CMG stock has declined 33.6% over the past year compared with the industry’s decrease of 6.4%. In the same time frame, shares of other industry players like Domino’s Pizza, Inc. DPZ, CAVA Group, Inc. CAVA and Restaurant Brands International Inc. QSR have declined 10% and 54.8%, and gained 8%, respectively.
Image Source: Zacks Investment Research
Analysts have expressed concerns that CMG stock is overvalued. The company is currently valued at a premium compared with its industry on a forward 12-month P/E basis. Its forward 12-month price-to-earnings ratio stands at 31.97, higher than the industry average.
P/E (F12M)
Image Source: Zacks Investment Research
Investment Thoughts for CMG
CMG appears to be at an important inflection point where the business fundamentals remain intact, but near-term risks outweigh the upside ahead of earnings. The company continues to benefit from strong brand equity, menu innovation, loyalty engagement and disciplined unit expansion, which support long-term growth and justify existing investors staying invested.
However, earnings visibility heading into the quarter is clouded by margin pressure from higher input costs, elevated labor and marketing spend, and management’s decision to protect value rather than push pricing. With estimates not moving higher and the earnings model failing to clearly signal a beat, the risk of disappointment remains.
At the same time, the stock already reflects a premium valuation relative to peers, leaving little room for upside surprise in the near term. As a result, current investors can afford to hold and let the strategy play out, but new buyers may want to stay on the sidelines until earnings provide clearer confirmation on margins and growth momentum.
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Chipotle to Report Q4 Earnings: Should You Buy Before the Breakout?

Key Points
SoundHound is growing rapidly, but it’s still posting steep losses.
SoundHound’s stock isn’t cheap, and it hasn’t proven its business model is sustainable.
Apple, which weaves Siri across its walled garden, might be a better voice AI play.
SoundHound AI (NASDAQ: SOUN), a developer of audio and speech recognition tools, grew rapidly in recent years as more companies launched their own AI-powered voice services. Its namesake app can identify songs from just a few seconds of recorded audio or a few hummed bars. Still, it generates most of its revenue from Houndify -- a developer platform for creating customized voice recognition apps that aren't tethered to big tech companies.
SoundHound already serves automakers like Stellantis, quick-serve restaurants like Chipotle, and credit card giants like Mastercard. Over the past two years, it acquired the AI restaurant services provider SYNQ3, the online food ordering platform Allset, the conversational AI company Amelia, and the customer service AI company Interactions to increase its exposure to the restaurant and AI chatbot industries.
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From 2020 to 2024, SoundHound's revenue grew at a CAGR of 60%. From 2024 to 2027, analysts expect its revenue to grow at a 49% CAGR to $283 million, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turning positive in the final year.
That makes SoundHound one of the market's fastest-growing AI stocks, but it's also valued accordingly. With a market capitalization of $4.18 billion, it trades at 18 times its 2026 sales. It's also increasingly dependent on acquisitions to offset its slowing organic growth, and its gross margins are declining. It's expected to remain unprofitable under generally accepted accounting principles (GAAP) through 2027. It's also more than doubled its outstanding share count since it went public via a merger with a special purpose acquisition company (SPAC) in April 2022. That dilution will likely continue for the foreseeable future.
In other words, SoundHound hasn't yet proven its business model is sustainable. So instead of chasing this volatile stock in this choppy market, it might be smarter to simply stick with Apple (NASDAQ: AAPL) as a safer way to profit from the growth of the voice AI market.
Why is Apple a safer and smarter bet on the voice AI market?
Apple might not initially seem like a voice AI company, since it generates most of its revenue from its hardware products. In fiscal 2025 (which ended last September), it generated 50% of its revenue from the iPhone, 8% from the Mac, and 7% from the iPad. Another 9% came from its wearables, home devices, and accessories. The remaining 26% came from its services -- including its App Store, iCloud, Apple TV, and other subscription-based services.
Apple also doesn't actively monetize Siri, the voice assistant, which it launched in 2011. Instead, it acts as the voice-activated gatekeeper to the company's sprawling services -- which weave through its iPhones, iPads, Macs, Watches, Apple TVs, and other devices.
Unlike other cloud-based voice AI services, Siri can process many of its commands locally on its devices. That feature speeds up its voice queries, keeps users' data private, and reduces Apple's cloud infrastructure costs. Apple also develops its own "Neural Engine" chips to process those tasks more efficiently, and it's been gradually upgrading Siri's own large language model (LLM) to improve its conversational AI capabilities.
Siri doesn't need to make money for Apple. It merely keeps its customers locked into its software ecosystem through its devices -- which are closed off in a "walled garden" that makes it difficult to switch to Android or Windows-powered devices.
By locking its customers into that ecosystem, it ensures it can continue selling more iPhones, Macs, and iPads while expanding into new markets like connected cars and mixed-reality devices. It will also complement its rollout of more gesture-based and eye-tracking services.
From fiscal 2021 to fiscal 2025, Apple's revenue and earnings per share (EPS) grew at CAGRs of 3% and 7%, respectively. Those growth rates might seem anemic compared to SoundHound's, but Apple's prisoner-taking business model is more sustainable. It also bought back 12% of its shares over the past five years.
From fiscal 2025 to fiscal 2028, Wall Street expects its revenue and EPS to grow at CAGRs of 7% and 11%, respectively, driven by the next iPhone upgrade cycle, the growth of its services ecosystem, and the increasing stickiness of its Siri-powered "Apple Intelligence" features. Its stock still looks reasonably valued at 28 times next year's earnings, and it should deliver more reliable gains than SoundHound AI and other smaller AI plays for the foreseeable future.
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Leo Sun has positions in Apple. The Motley Fool has positions in and recommends Apple, Chipotle Mexican Grill, Mastercard, and SoundHound AI. The Motley Fool recommends Stellantis and recommends the following options: short March 2026 $42.50 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Forget SoundHound AI: This Walled‑Garden Superpower Is the Safer, Smarter Way to Profit From Voice AI

Key Points
MercadoLibre continues to grow its e-commerce business while monetizing more per transaction.
Tex-Mex restaurant chain Chipotle has raised menu prices for years while growing same-store sales.
Pricing power is one of the best qualities to look for in a business. It means a company's product is so valuable to customers that it can raise prices without losing demand. Over time, that kind of leverage helps companies stay profitable during rough economic patches.
Two consumer-facing leaders showing that kind of strength today are MercadoLibre (NASDAQ: MELI) and Chipotle Mexican Grill (NYSE: CMG). Here's why.
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1. MercadoLibre
MercadoLibre continues to widen its competitive lead in much of Latin America. It offers a compelling ecosystem of services across marketplace shopping, credit cards, mobile payments, and more. It demonstrates solid pricing power -- a sign that there is no alternative to the value it offers its customers.
The clearest sign of pricing power is its growing transaction take rate, which measures its e-commerce revenue relative to the total value of all transactions (gross merchandise volume) on its marketplace. Its e-commerce take rate rose to 25.2% in the third quarter of 2025, up from 18.4% in the same quarter two years ago. This shows the company is extracting more value from each transaction.
The take rate is climbing, while demand continues to grow. Unique active buyers rose 26% year over year last quarter. The company continues to add "Amazon-like" features to attract customers, including free same-day shipping and loyalty benefits through the Meli+ membership program.
MercadoLibre has built a powerful growth flywheel. In its fintech segment, monthly active buyers rose 29% year over year to 72 million last quarter. The company's credit card offers attractive benefits, including free financing and cashback through Meli+. It's a powerful cross-sell opportunity that MercadoLibre can leverage to build strong pricing power -- supporting long-term earnings growth.
Analysts expect earnings to grow 32% annually in the coming years. With leadership in both e-commerce and fintech, investing in MercadoLibre should be rewarding for years to come.
2. Chipotle Mexican Grill
Chipotle has delivered solid returns to investors over the last 10 years, with shares up 352% even after the recent dip. This reflects consistent operating performance in a highly competitive industry. Its service quality, where its tasty menu is prepared quickly, has translated into pricing power.
The Tex-Mex restaurant chain has regularly increased menu prices while maintaining demand. Menu prices increased 5.2% in 2023, 2.9% in 2024, and 2.3% through the first three quarters of 2025. Those price hikes in 2023 and 2024 didn't hurt customer traffic, as the company delivered same-store sales growth of more than 7%.
The past year has been a challenge for restaurants, as fewer customers are eating out. Chipotle reported a 7% year-over-year increase in total revenue last quarter, with same-store sales up just 0.3%. Despite weaker growth, it retains an attractive value position, with management noting that its prices are 20% to 30% below peers. This suggests there may be room to raise prices while still offering good value.
Chipotle's pricing power and growth potential should serve shareholders well. The company has nearly 4,000 locations today, and management believes it can reach 7,000 locations in the long term. That growth potential explains why the stock still trades around 33 times forward earnings, even after falling 41% from its prior high.
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John Ballard has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Chipotle Mexican Grill, and MercadoLibre. The Motley Fool recommends the following options: short March 2026 $42.50 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

MercadoLibre and Chipotle: 2 Consumer Names With Serious Pricing Power​

Chipotle Mexican Grill, Inc. CMG and Sweetgreen, Inc. SG represent two very different ways to play the fast-casual dining theme, making them a compelling head-to-head for investors. CMG brings the heft of a scaled, cash-generating leader with a long track record of traffic resilience and margin discipline, while SG is a newer, growth-oriented concept betting on technology, menu innovation and brand relevance with younger consumers.
As the restaurant industry navigates shifting dining habits and value-conscious customers, along with uneven demand trends, the key question for investors is whether Chipotle's stability and proven execution outweigh Sweetgreen’s longer-term growth potential, or if the latter’s runway justifies the added risk.
The Case for CMG
Chipotle’s long-term growth story remains anchored in disciplined unit expansion and industry-leading economics. Management reiterated confidence in scaling toward 7,000 restaurants over time, backed by strong new-unit productivity, attractive cash-on-cash returns and minimal cannibalization of existing stores. Even with an aggressive development cadence, new locations are ramping efficiently and recovering quickly, reinforcing Chipotle’s ability to grow its footprint while preserving returns and brand strength.
Another major positive is Chipotle’s renewed focus on operational execution and throughput improvements. The rollout of high-efficiency kitchen equipment is already showing early benefits, including better labor efficiency, faster prep times and improved guest satisfaction. These operational upgrades, combined with retraining efforts and incentive realignment, position the company to handle peak demand more effectively and support higher transaction volumes once consumer pressure eases.
Menu innovation and digital engagement also stand out as key demand drivers. Limited-time offerings such as new sauces and protein additions have demonstrated an ability to spark trial, lift transactions and increase long-term customer value. At the same time, Chipotle’s loyalty initiatives and gamified digital promotions are improving engagement among infrequent users, giving the brand multiple levers to reignite traffic without relying on heavy discounting.
Despite these strengths, near-term performance is being held back by persistent macro-driven traffic softness. Management acknowledged ongoing pressure from lower and middle-income consumers and younger diners, cohorts that make up a meaningful portion of Chipotle’s sales base. With the company choosing not to fully offset rising input costs through pricing, margins are likely to remain under pressure in the near term, creating a temporary trade-off between protecting value perception and delivering earnings leverage.
The Case for SG
Sweetgreen’s transformation narrative is gaining structure and discipline, which strengthens its long-term investment appeal. Management has clearly outlined the Sweet Growth Transformation Plan, centered on operational excellence, brand relevance, menu innovation, digital personalization and disciplined capital allocation. Early signs are encouraging; the share of restaurants meeting internal operating standards has improved meaningfully, while initiatives like Project One Best Way and enhanced throughput metrics are beginning to standardize execution across the system. These steps should gradually improve consistency, guest satisfaction and restaurant-level performance as they scale across the fleet.
Another major positive is Sweetgreen’s continued commitment to menu quality and differentiation, which reinforces its brand moat in the fast-casual space. The company is leaning into protein-forward offerings, larger portions and transparent ingredient sourcing to better communicate value to customers. Upcoming innovations, such as a new steak bowl, steak plate and a handheld product test in early 2026, expand the brand’s relevance across more dining occasions. At the same time, management is reassessing menu and pricing architecture to create clearer entry points and trade-up options — an important lever to drive frequency and rebuild traffic without diluting the premium brand image.
Financial flexibility has also improved following the strategic sale of the Spyce automation unit to Wonder. The transaction is expected to add roughly $100 million in liquidity, reduce annual G&A expenses and allow Sweetgreen to continue benefiting from Infinite Kitchen technology without the burden of owning and scaling the platform internally. Importantly, Infinite Kitchen restaurants are already delivering material labor and cost-of-goods advantages, supporting margins and throughput. This move sharpens management’s focus on core restaurant operations while strengthening the balance sheet, positioning the company to pursue profitable growth with greater discipline.
Despite these strategic positives, Sweetgreen’s near-term fundamentals remain pressured. The company reported a sharp same-store sales decline, due to weaker traffic, softer demand among younger consumers and pronounced underperformance in key markets such as the Northeast and Los Angeles. Margin erosion has been significant, with restaurant-level margins and adjusted EBITDA deteriorating year over year due to sales deleverage, higher labor costs and increased food expenses tied to protein portion investments.
While management expects improvement over time, the path to sustained traffic recovery and profitability is still uncertain, leaving SG exposed to ongoing consumer weakness and competitive intensity in the fast-casual landscape.
How Does the Zacks Consensus Estimate Compare for CMG & SG?
The Zacks Consensus Estimate for Chipotle’s 2026 sales and earnings per share (EPS) indicates year-over-year increases of 9.8% and 4.2%, respectively. In the past seven days, earnings estimates for 2026 have increased.
CMG Earnings Estimate Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SG’s 2026 sales and EPS implies year-over-year increases of 9.4% and 13.5%, respectively. In the past seven days, loss estimates for 2026 have widened.
SG Earnings Estimate Trend
Image Source: Zacks Investment Research
Price Performance & Valuation of CMG & SG
Chipotle’s shares have dropped 10.7% in the past three months. Meanwhile, Sweetgreen stock has tanked 50.9% in the same time frame compared with its industry's decline of 0.9%. The S&P 500 has risen 11.7% in the same period.
CMG & SG Stocks’ Three-Month Price Performance
Image Source: Zacks Investment Research
CMG is trading at a forward 12-month price-to-sales (P/S) multiple of 3.97, above the industry average of 3.66 over the last year. SG’s forward 12-month P/S multiple sits at 1.02 over the same time frame.
P/S (F12M)
Image Source: Zacks Investment Research
Wrapping Up
Taken together, the comparison clearly tilts in favor of Chipotle at this stage of the cycle. While both companies are navigating a cautious consumer backdrop, Chipotle is doing so from a position of strength, with proven unit economics, disciplined expansion and operational improvements that can translate into upside as traffic stabilizes. The company’s ability to protect brand value, invest in efficiency and drive demand through innovation without heavy discounting underscores the durability of its model.
In contrast, Sweetgreen is still in the middle of a multi-year turnaround, facing uneven execution, traffic pressure in key markets and margin volatility that make its recovery less predictable. Even though both stocks carry a Zacks Rank #3 (Hold), Chipotle’s scale, consistency and clearer earnings visibility give it the edge over Sweetgreen for investors seeking a more reliable fast-casual holding right now.
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CMG vs. SG: Which Restaurant Stock Deserves a Spot in Your Portfolio?

(RTTNews) - Chipotle Mexican Grill, Inc. (CMG), Tuesday announced its decision to re-introduce Chicken al Pastor to restaurants in the U.S., Canada, the UK, France and Germany for a limited time.
Chicken al Pastor is made with freshly grilled chicken, a rich marinade featuring seared morita peppers and ground achiote, balanced with a splash of pineapple for the right amount of heat, and finished with fresh lime and hand-chopped cilantro.
Staring February 10, the company will bring back Chicken al Pastor as part of its 2026 menu innovation schedule with three to four limited-time protein offerings as well as new sides and dips.
Moreover, Chipotle is offering a $0 delivery fee on all Chicken al Pastor orders placed through its app and websites from Saturday, February 14, through Saturday, February 28.
In the pre-market hours, CMG is trading at $39.59, down 0.34 percent on the New York Stock Exchange.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Chipotle Mexican Grill To Reintroduce Chicken Al Pastor In US, Canada, UK, France, Germany

Key Points
Investors are becoming pessimistic about this business due to falling same-store sales.
Chipotle’s cheaper valuation, growth potential, and profitability are key reasons to buy the stock.
With its success at scaling the fast casual dining concept across the U.S., Chipotle Mexican Grill (NYSE: CMG) is a trailblazer in the restaurant sector. But the stock is getting pummeled of late. It's trading 41% off its record high (as of Jan. 21).
Right now, shares go for well below $45. Is Chipotle a buy?
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Chipotle is feeling the macroeconomic pinch
When the business reports financial results for fourth-quarter 2025 (ended Dec. 31) on Feb. 3, Chipotle plans to post a same-store sales decline in the low single-digit range for the full year of 2025. Weaker foot traffic in an uncertain macro backdrop among lower-income consumers is the culprit. Market sentiment for the stock has made a negative shift, especially since Chipotle has typically operated from a position of fundamental strength.
Look past recent struggles with this stock
However, investors should still consider buying the stock. The valuation, which is more attractive now, is one reason why. Shares can be purchased at a price-to-earnings ratio of 35.9, near a five-year low.
Chipotle continues to expand rapidly. It's looking to nearly double the current footprint to 7,000 locations in the U.S. and Canada in the long run. This doesn't include the company's smaller presence in various international markets.
The business has brand recognition in the industry, and its scale has resulted in significant profitability. Patient investors will want to take a closer look at Chipotle stock while it's on the dip and trading below $45.
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 $464,439!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,150,455!*
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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 March 2026 $42.50 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Should You Buy Chipotle Stock While It's Below $45?

Starbucks Corporation SBUX is scheduled to release first-quarter fiscal 2026 results on Jan. 28.
The Zacks Consensus Estimate for SBUX’s first-quarter fiscal 2026 earnings per share (EPS) is pegged at 58 cents, indicating 15.9% decline from 69 cents reported in the prior-year quarter. The consensus mark for earnings has witnessed downward revisions in the past 60 days.
SBUX earnings have missed the Zacks Consensus Estimate in the trailing three out of four quarters and beat on the remaining occasion, with an average miss of 10.1%.
Image Source: Zacks Investment Research
The consensus mark for first-quarter fiscal 2026 revenues is pegged at $9.65 billion, indicating a 2.7% increase from the year-ago quarter’s reported figure.
Q1 Earnings Whispers for SBUX Stock
Our proven model does not predict an earnings beat for Starbucks this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
SBUX’s Earnings ESP: Starbucks has an Earnings ESP of -2.01%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Starbucks Zacks Rank: The company carries a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Influence Starbucks’ Q1 Results
The company’s revenues in first-quarter fiscal 2026 are likely to have been aided by a tangible improvement in customer traffic as its operational reset gained traction. During the last quarter conference call, management highlighted that U.S. company-operated comparable sales turned positive in September and stayed positive into October, signaling momentum entering the fiscal first quarter. This recovery was largely transaction-led rather than price-driven, reflecting improved service execution, better order sequencing and more consistent staffing during peak hours. As service times shortened and reliability improved across café, drive-thru and mobile channels, Starbucks was able to recapture visits across dayparts, particularly in the morning, which historically anchors its revenue base.
Menu innovation and brand re-engagement are also likely to have supported top-line growth. The fall launch, including the introduction of protein-based beverages and cold foam options, is expected to have helped attract less-frequent customers while encouraging customization across a broad range of drinks. These offerings resonated with health and value-conscious consumers and were positioned as incremental rather than promotional, allowing Starbucks to drive revenue without heavy discounting.
International operations are likely to have further bolstered consolidated revenue growth in the quarter. Starbucks entered fiscal 2026 with strong momentum across several key markets, including China, Japan, the United Kingdom and Mexico, all of which delivered positive comparable sales exiting fourth-quarter fiscal 2025. China benefited from transaction growth and expanding delivery adoption, while disciplined unit expansion added incremental sales. Combined with robust performance in Channel Development, driven by ready-to-drink and global coffee partnerships, these factors provided geographic and channel diversification that supported overall revenue growth in first-quarter fiscal 2026.
Despite improving revenues, earnings in the first quarter of fiscal 2026 were pressured by elevated cost structures tied to Starbucks’ turnaround investments and external inflation. Labor expenses rose as the company fully annualized incremental staffing and hours under the Green Apron Service model, while assistant store manager roles began scaling. At the same time, commodity headwinds, particularly persistently high coffee prices and tariff impacts, are likely to have weighed on margins. Management was clear that these costs would precede earnings recovery, reinforcing that fiscal 2026 would remain a transition year in which profitability lagged top-line improvement.
SBUX Stock’s Price Performance & Valuation
Shares of Starbucks have lost 3% in the past year compared with the industry’s decline of 1.9%. In the same time frame, other industry players like McDonald's Corporation MCD, Dutch Bros Inc. BROS and Chipotle Mexican Grill, Inc. CMG have gained 7.2%, 0.8% and down 28.5%, respectively.
Image Source: Zacks Investment Research
From a valuation standpoint, SBUX trades at a forward price-to-earnings (P/E) multiple of 37.88, above the industry’s average of 24.79. Conversely, industry players, such as McDonald's, Dutch Bros and Chipotle, have P/E multiples of 22.9, 67.79 and 33.5, respectively.
P/E (F12M)
Image Source: Zacks Investment Research
Investment Considerations for SBUX Stock
Investors may want to stay on the sidelines ahead of Starbucks’ first-quarter earnings release as the near-term risk-reward remains skewed to the downside. While customer traffic and revenues appear to be stabilizing, earnings momentum is still weak, with profitability pressured by elevated labor costs, ongoing turnaround investments and commodity inflation that management has already signaled will weigh on results before any meaningful recovery.
The stock’s recent earnings history also raises caution, as Starbucks has struggled to consistently meet expectations, which increases the risk of volatility around the print. Adding to this, the shares trade at a premium valuation relative to most peers despite underperforming the broader restaurant group, leaving little margin for error. Until there is clearer evidence that revenue improvements are translating into sustained margin expansion, avoiding the stock ahead of earnings may be the more prudent approach.
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Should You Buy, Sell or Hold SBUX Stock Before Q1 Earnings Release?

Chipotle Mexican Grill, Inc.’s CMG third-quarter 2025earnings callmade it clear that the near-term challenge is not demand destruction, but declining visit frequency caused by macro pressure. Management acknowledged that traffic softness is most pronounced among lower to middle-income consumers and the 25-35 age cohort, which historically anchors Chipotle’s sales base. In response, CMG has unveiled its “Recipe for Growth,” a three-pronged strategy centered on operations, marketing and digital engagement.
Operations sit at the heart of this plan. Rather than leaning on discounts, Chipotle is doubling down on execution inside the restaurant. Management highlighted renewed systemwide retraining, revised incentive structures tied to digital order accuracy and the rollout of its high-efficiency equipment package (“HEEP”). Early results from HEEP-equipped locations indicate improved throughput, higher food quality scores and enhanced labor efficiency, key factors in maintaining a consistent guest experience during peak periods. These improvements are designed to remove friction that can quietly erode traffic even when brand affinity remains high.
Still, operations alone may not be a quick fix. Management admitted that while marketing and limited-time menu innovations can spark short-term transaction lifts, underlying traffic trends remain pressured by consumer uncertainty. That places greater importance on operational excellence as a controllable lever, one that can reinforce Chipotle’s value proposition without sacrificing pricing discipline.
Ultimately, CMG’s Recipe for Growth suggests a belief that fixing fundamentals will reignite the consumer flywheel. The plan may not fully offset macro headwinds in the short run, but if operational consistency improves as intended, it could position Chipotle to recapture traffic momentum once the consumer environment stabilizes.
Operational Fixes in Focus: How CMG Compares With SG and CAVA
Chipotle’s bet on operations-led traffic recovery mirrors the strategies of two publicly traded fast-casual peers: Sweetgreen SG and CAVA Group CAVA. Sweetgreen is aggressively investing in kitchen automation through the Infinite Kitchen model, aiming to improve throughput, accuracy and labor efficiency, exactly the friction points Chipotle is addressing with its high-efficiency equipment rollout. Both brands are targeting traffic recovery by fixing execution rather than leaning on discounting.
CAVA, meanwhile, is emphasizing menu simplification, line efficiency and strong in-restaurant execution to support higher frequency and average check growth. Its smaller footprint makes operational consistency easier to manage, but also limits the scale of impact compared with Chipotle’s approximately 4,000 restaurants.
Together, SG and CAVA highlight the same industry truth behind CMG’s Recipe for Growth – in a pressured consumer environment, sustainable traffic recovery is increasingly tied to operational excellence, not promotional intensity.
CMG’s Price Performance, Valuation and Estimates
Chipotle’s shares have lost 25.6% in the past six months compared with the industry’s decline of 4%.
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From a valuation standpoint, CMG trades at a forward price-to-sales ratio of 3.94X, up from the industry’s average.
P/S (F12M)
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The Zacks Consensus Estimate for CMG’s 2025 and 2026 earnings implies a year-over-year uptick of 3.6% and 3.4%, respectively.
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Chipotle currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Chipotle's Recipe for Growth: Can Operations Fix the Traffic Problem?

Key Points
SoundHound AI will profit from the growing demand for voice recognition tools.
Lemonade will pull customers away from traditional insurance companies.
CoreWeave will open more data centers to support those AI services.
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SoundHound AI
SoundHound AI develops AI-powered voice and audio recognition tools. Its namesake app can identify songs by hearing just a few seconds of recorded audio or a few hummed bars. However, it generates most of its revenue and growth from Houndify, its developer-oriented platform for creating customized voice recognition apps for a wide range of industries.
SoundHound has been acquiring smaller companies to expand its presence in the restaurant and customer service chatbot markets. It already serves automakers like Stellantis, restaurants like Chipotle, and credit card giants like Mastercard, and it should attract more customers who want to develop their own voice recognition services without sharing their data with larger tech companies.
From 2025 to 2027, analysts expect SoundHound's revenue to grow at a 30% CAGR, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turning positive in the final year. With an enterprise value of $4.5 billion, it might seem pricey at 20 times this year's sales. However, its early mover's advantage in the growing voice recognition services market should justify that higher valuation. Over the next decade, it should continue to expand and evolve as it acquires more companies and rolls out more agentic AI tools.
Lemonade
Lemonade sells homeowners, renters, term life, pet, and auto insurance policies. It's popular with younger and first-time insurance customers because it simplifies the byzantine buying process with a streamlined AI-powered app.
Using AI chatbots instead of human representatives can quickly onboard new customers and process claims in a few seconds. From the end of 2020 to the third quarter of 2025, its customer base nearly tripled from 1.00 million to 2.87 million.
From 2025 to 2027, analysts expect Lemonade's revenue and adjusted EBITDA to grow at a CAGR of 44%, with adjusted EBITDA turning positive in the final year. The expansion of its newer pet and auto insurance businesses, its overseas growth (especially in Europe), and its rollout of more AI features should drive those gains.
With an enterprise value of $6.2 billion, Lemonade still looks reasonably valued at five times this year's sales. However, it could command a much higher valuation if it scales up its business and pulls millions of customers away from traditional insurance companies.
CoreWeave
CoreWeave was once an Ethereum miner, but it abandoned that business model after the 2018 cryptocurrency crash. It subsequently repurposed its mining GPUs to remotely process machine learning and AI tasks, acquired more than 250,000 high-end data center GPUs from Nvidia, and expanded its business from three data centers at the end of 2022 to 33 data centers today.
CoreWeave claims its dedicated cloud-based GPUs can process AI tasks 35 times faster and 80% more cost-effectively than other cloud infrastructure platforms. Those strengths make it a popular choice for companies which don't want to expand their own infrastructure to support their latest AI applications. As it locks in more AI customers -- including Microsoft and OpenAI -- analysts expect its revenue and adjusted EBITDA to grow at a CAGR of 95% and 109%, respectively, from 2025 to 2027.
CoreWeave is growing like a weed, yet it has an enterprise value of only $87.9 billion -- which equates to 7x this year's sales and 11x adjusted EBITDA. The high costs of opening new data centers are likely compressing its near-term valuations, but it could have plenty of room to grow over the long term as the cloud and AI markets expand.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Chipotle Mexican Grill, Ethereum, Lemonade, Mastercard, Microsoft, Nvidia, and SoundHound AI. The Motley Fool recommends Stellantis and recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short March 2026 $42.50 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Artificial Intelligence (AI) Stocks With More Potential Than Any Cryptocurrency

McDonald’s Corporation MCD is currently trading at a slight valuation discount that could appeal to value-focused investors. The stock’s forward 12-month price-to-earnings (P/E) ratio stands at 23.02, below the restaurant industry average of 24.64, indicating that the market is taking a somewhat cautious stance toward the fast-food giant despite its scale and brand strength.
P/E (F12M)
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From a performance standpoint, McDonald’s shares have held up relatively well. Over the past six months, the stock has gained 4%, outperforming the broader restaurant industry, which declined 2.1% over the same period. That said, MCD has lagged the S&P 500’s 13% rally, highlighting a degree of investor preference for higher-growth names. Meanwhile, several industry peers have struggled, with Chipotle Mexican Grill CMG, Kura Sushi USA KRUS and Restaurant Brands International QSR posting declines of 23.8%, 7.6% and 0.8%, respectively.
Price Performance
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This raises a key question for investors — is McDonald’s lower valuation a sign of short-term challenges or an opportunity to buy a global fast-food leader at a more attractive price?
Factors Aiding MCD Stock
McDonald’s continues to demonstrate the resilience of its global business model, even in a pressured consumer environment. In the third quarter of fiscal 2025, the company delivered solid global comparable sales growth, supported by gains across all operating segments. Management highlighted consistent traffic share gains in many key markets, underscoring the brand’s ability to outperform peers when execution around value, marketing and menu innovation is strong. This operational consistency reinforces the idea that McDonald’s remains a dependable compounder, which strengthens the argument that its current valuation may underestimate long-term earnings durability.
Another key positive is McDonald’s renewed focus on value architecture, particularly in the United States. The relaunch of Extra Value Meals and the broader McValue platform aims to restore affordability perceptions across core menu items that drive a large portion of transactions. Early results suggest improving customer engagement and traffic trends, especially as awareness builds. Importantly, management views these initiatives as structural rather than short-term promotions, which could help stabilize volumes and support steady cash generation over time — an attractive trait for value-oriented investors.
Internationally, McDonald’s continues to lean on its scale and localization strategy to drive growth. Markets such as Germany, Australia and Japan are delivering positive comparable sales and market share gains, supported by disciplined pricing, targeted innovation and localized marketing campaigns. Meanwhile, investments in high-growth categories like beverages and chicken position the company to capture incremental occasions and higher average checks. These initiatives suggest McDonald’s is not merely defending its base but actively laying the groundwork for growth, which could justify a re-rating if execution remains on track.
Factors Likely to Hurt MCD
Despite these strengths, near-term macro pressures remain a meaningful overhang. Management acknowledged that lower-income consumers continue to cut back on quick-service restaurant visits, with traffic declines persisting for nearly two years. While McDonald’s is gaining share within this cohort, absolute demand remains weak and executives expect these pressures to linger into 2026. This dynamic limits near-term upside to same-store sales and raises questions about how quickly value initiatives can fully offset broader affordability challenges.
Margin pressure is another concern that tempers enthusiasm around the stock’s cheap valuation. Elevated input costs, particularly beef, wages, and other food and paper expenses, continue to weigh on profitability. At the same time, aggressive value investments, including co-funding discounts with franchisees, create a near-term drag on margins. While management remains confident in long-term margin expansion, investors may need patience, as earnings growth could remain subdued until inflation eases and traffic momentum strengthens meaningfully.
McDonald's Growth Projection Encourages
In the past 30 days, the company’s earnings for 2025 and 2026 have increased 1 cent and 4 cents to $12.09 and $13.29, respectively. The Zacks Consensus Estimate for MCD’s 2025 and 2026 earnings per share indicates year-over-year increases of 3.2% and 9.9%, respectively.
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The consensus estimate for revenues is pegged at $26.68 billion and $28.26 billion for 2025 and 2026, respectively, implying year-over-year improvements of 2.9% and 5.9%.
Wrapping Up
McDonald’s remains a stock worth holding for existing investors because its global scale, brand strength and operational discipline continue to deliver steady performance even in a challenging consumer environment. The company is gaining traffic share in key markets, executing well on value and menu innovation, and strengthening long-term positioning through initiatives like its value platform and international localization strategy, all of which support dependable cash generation and earnings durability.
However, fresh buying should be approached cautiously, as near-term headwinds persist. Consumer spending pressure, particularly among lower-income diners, is still weighing on overall demand, while elevated input costs and margin sacrifices tied to value investments are likely to keep earnings growth muted in the near term. Until traffic trends improve more broadly and margin visibility strengthens, McDonald’s looks better suited as a steady hold rather than an attractive entry point for new investors.
MCD currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Indicator	TTM Median
P/E	31.56 20.72
Price/Sales	4.88 0.69
P/B	15.74 1.91
P/FCF	37.88 15.39

Indicator	TTM Median
ROE	44.24 14.63
ROA	16.89 5.12
ROI	0.00 8.44
Net Worth	55.91 0.90
Quick Ratio	1.62 0.88
Current Ratio	1.65 1.45

Indicator	TTM Median
Net Profit Margin	13.04 5.72
Operating Margin	16.65 8.45
Gross Margin	25.98 38.39
Return on tangible equity	43.43 21.87

Indicator	TTM Median
EPS	0.29 0.42
EPS Forecast	0.28 0.38
Revenue	3.06B 185.00M
Gross Profit	838.00M —
EBITDA	568.00M —

Chipotle Mexican Grill, Inc.

TTM metrics for the latest quarter under IFRS and their historical dynamics

Valuation

Debts

Efficiency

Other ratios

Revenue