Early Bird Prime for September 1, 2024

Chipotle Mexican Grill (NYSE: CMG), the beloved burrito behemoth, has long been considered a top restaurant stock by most analysts, and for good reason.

With a 234% increase over the past five years, including a tasty 24.90% gain in 2024, it’s no wonder investors have been favoring this stock. 

Since mid-June, Chipotle’s stock has taken an 18% nosedive, leaving investors scratching their heads and wondering if it’s time to double down or ditch the stock altogether.

The plot thickens with a 50-for-1 stock split in June, which, instead of causing a fiesta, ultimately led to decreased enthusiasm and profit-taking among investors.

Adding to the uncertainty, Chipotle's CEO Brian Niccol, who has been at the helm since 2018 and is widely credited with the company's recent success, resigned in August. Niccol officially left the company on Saturday, leaving a significant leadership void. Under his leadership, Chipotle saw tremendous success, making his departure a bit like losing the secret ingredient in your favorite salsa.

The departure of CFO Jack Hartung further compounds the leadership instability, as he too is leaving the company.

Enter Scott Boatwright, the interim CEO. Yes, you read that right—interim. It’s like being handed a burrito with a question mark on it. Why isn’t he permanent? Is he just a placeholder until they find someone else, or is he the secret sauce Chipotle needs? The uncertainty is enough to make any investor’s stomach churn.

Given these developments, the key question for investors is whether to buy Chipotle stock or view the recent downturn as a sign to avoid the stock. Should you buy the stock now? Should you sell it if you already own it? Well, here’s the answer: