Financial Review: Chipotle Mexican Grill (CMG) and Red Robin Gourmet Burgers (RRGB)
Chipotle Mexican Grill (NYSE: CMG) and Red Robin Gourmet Burgers (NASDAQ:RRGB) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.
Valuation & Earnings
This table compares Chipotle Mexican Grill and Red Robin Gourmet Burgers’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Chipotle Mexican Grill||$4.31 billion||2.04||$397.78 million||$4.74||64.90|
|Red Robin Gourmet Burgers||$1.32 billion||0.65||$131.93 million||$0.64||103.52|
Chipotle Mexican Grill has higher revenue and earnings than Red Robin Gourmet Burgers. Chipotle Mexican Grill is trading at a lower price-to-earnings ratio than Red Robin Gourmet Burgers, indicating that it is currently the more affordable of the two stocks.
This table compares Chipotle Mexican Grill and Red Robin Gourmet Burgers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Chipotle Mexican Grill||3.17%||10.65%||7.38%|
|Red Robin Gourmet Burgers||0.64%||8.00%||3.18%|
Risk & Volatility
Chipotle Mexican Grill has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Red Robin Gourmet Burgers has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.
Insider and Institutional Ownership
90.1% of Chipotle Mexican Grill shares are held by institutional investors. 2.0% of Chipotle Mexican Grill shares are held by company insiders. Comparatively, 2.7% of Red Robin Gourmet Burgers shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a breakdown of recent recommendations and price targets for Chipotle Mexican Grill and Red Robin Gourmet Burgers, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Chipotle Mexican Grill||4||22||9||0||2.14|
|Red Robin Gourmet Burgers||0||5||6||0||2.55|
Chipotle Mexican Grill presently has a consensus price target of $391.44, suggesting a potential upside of 27.24%. Red Robin Gourmet Burgers has a consensus price target of $71.60, suggesting a potential upside of 8.08%. Given Chipotle Mexican Grill’s higher probable upside, analysts clearly believe Chipotle Mexican Grill is more favorable than Red Robin Gourmet Burgers.
Chipotle Mexican Grill beats Red Robin Gourmet Burgers on 11 of the 14 factors compared between the two stocks.
Chipotle Mexican Grill Company Profile
Chipotle Mexican Grill, Inc. (Chipotle), together with its subsidiaries, operates Chipotle Mexican Grill restaurants. The Company’s Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. As of December 31, 2016, the Company managed its operations and restaurants based on 11 regions. As of December 31, 2016, the Company operated 2,198 Chipotle restaurants throughout the United States, as well as 29 international Chipotle restaurants, and it also had 23 restaurants in operation in other non-Chipotle concepts. As of December 31, 2016, 29 of its restaurants were located outside of the United States, with 17 in Canada, six in the United Kingdom, five in France and one in Frankfurt, Germany. The Company sells gift cards, which do not have an expiration date. The Company categorizes its restaurants as end-caps (at the end of a line of retail outlets), in-lines (in a line of retail outlets), free-standing or other.
Red Robin Gourmet Burgers Company Profile
Red Robin Gourmet Burgers, Inc., together with its subsidiaries, primarily develops, operates, and franchises full-service restaurants in North America and focuses on serving selection of gourmet burgers. The Company’s menu features a line of gourmet burgers, which it makes from ground beef, as well as its line of Red’s Tavern Double Burgers and its Red Robin’s line of half-pound Angus beef burgers with various toppings. The Company also offers burgers made from chicken breasts, fish fillets, turkey patties, as well as vegetarian and vegan options. The Company offered a selection of buns, including ciabatta, gluten free, sesame, onion, whole grain, jalapeno and lettuce wraps a range of toppings, including fresh guacamole, house made barbeque sauces, aiolis, grilled pineapple, crispy onion straws, sauteed mushrooms, fried jalapenos, bruschetta salsa, coleslaw, eight different cheese choices and a fried egg, as of December 25, 2016.
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