Sure, there are still risks with buying Chipotle stock at current levels. Once the darling of Wall Street, the Denver-based fast-casual restaurant has suffered hits to its image, thanks to multiple outbreaks of E. coli which have forced the company to shut and revamp several of its restaurants. But Chipotle has taken steps to repair its brand and regain the trust of its customers, including closing its doors systemwide for food-handling training. But how much will that matter to investors?
Chipotle reports fourth-quarter fiscal 2015 earnings results after the closing bell Tuesday. Chipotle's stock has lost 38% of its value over the past 12 months. The company will need to deliver an upbeat outlook for 2016 to put a floor on this decline. And if management can quell analysts' fears about weakening profit margins and declining same-store sales growth, it's possible Chipotle stock, which reached a 52-week low of $399.14 on Jan. 12, has already reached bottom.
For the quarter that ended in December, the average analyst earnings-per-share estimate anticipates $1.86 a share on revenue of $1.01 billion, marking a decline of 51% and 6%, respectively. For the full year, earnings are projected to climb 5% to $14.83 a share, while full-year revenue of $5.89 billion would reflect growth of 43%.