Chipotle Mexican Grill initially soared by nearly 10% in after-hours on July 24, after the restaurant chain revealed strong second quarter results, especially with an increase in margins (because of its pricier menu, and what else did you expect?) complemented by growing rice bowls and burrito demand. However, the stock retraced to keep less than 4% of its overnight leap, which gives me a reason to talk about a rare opportunity to buy cheap enough but on solid fundamental momentum.

Comparable sales in the same restaurants climbed 11.1% YoY vs consensus forecasts of a nearly 9%, with expected further growth "in the mid-to-high single-digit" percentage for 2024, CMG CEOs said. Their customers' foot traffic grew 17% during the quarter, when the average number of traffic increase was only at 0.63% in the whole segment of fast-food and quick services (according to Placer.ai). A major slowdown is here yet setbacks seemingly don't cross the way Chipotle Mexican Grill goes.

The chain's stock gained from $44 in January to nearly $70 per share in late June, when the split using 1:50 ratio happened. Of course, I calculate the pre-split prices considering the split, which gives more than 55% of a price jump in the first half of 2024. Later the price retraced by 25% to nearly $50 on worries about inflation damaging household budgets. Now we see that things go better than the crowd feared, and so the next recovery stage is probably not far off, even though this recovery may be preceded by another fall for a while.