Jim Cramer has been reiterating for months that it would take about 18 months for Chipotle (CMG) - Get Chipotle Mexican Grill, Inc. Report to recover from its food-borne illness outbreak in late-2015.
Well, on Tuesday night his advice was validated. Chipotle beat on earnings per share and revenue expectations, and grew its comparable-store sales by nearly 18% in the quarter.
The conference call was "terrific," Cramer, the manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment. The company has simplified operations, boosted its online ordering and lowered several costs.
While the stock did spike to $500 in the after-hours session, it pulled back after the company disclosed an ongoing investigation into a payments system breach. Nevertheless, shares are up 3%-4% in early Wednesday trading.
The analysts' sell calls were wrong, Cramer said, adding that CFO John Hartung is a straight shooter. He was straightforward in the past about Chipotle's struggles. But now his tune has changed and he's much more positive.
Chipotle is back and it's bigger than ever, Cramer said. If the stock pulls back, it could be a great buying opportunity. The business will only get stronger as the year goes on, he concluded.
At the time of publication, Cramer's Action Alerts PLUS had no position in any companies mentioned.