Is Chipotle Mexican Grill, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Chipotle Mexican Grill, Inc. has moved from fair to very expensive, indicating that the stock is overvalued. The company exhibits a P/E ratio of 46, a Price to Book Value of 20.40, and an EV to EBITDA of 29.59, which are significantly higher than its peers, such as McDonald's Corp. with a P/E of 49.95 and Starbucks Corp. at 34.81. This suggests that Chipotle is trading at a premium compared to its industry counterparts.
In terms of performance, Chipotle's stock has underperformed relative to the S&P 500, with a year-to-date return of -33.98% compared to the S&P 500's 12.22%. Over a three-year period, Chipotle's return of 17.53% falls short of the S&P 500's impressive 70.41%, reinforcing the notion that the stock may not justify its current valuation.