Panera Bread Co. (PNRA-NASDAQ) versus Chipotle Mexican Grill, Inc. (CMG-NYSE)
Panera Bread Co., I believe, is attractively valued in the market with its price/earnings ratio and price/sales ratio of about 29.9X and 2.3X, respectively, versus respective ratios of about 35.7X and 3.7X, for Chipotle Mexican Grille (CMG-NYSE). (Ratios are calculated based on results for the last four quarters.) Furthermore, I believe that Panera Bread would still be the most attractive of the two stocks, despite its comparison of return on assets of about 14.86%, versus about 18.60% for Chipotle, and return on equity of about 21.57% for Panera Bread versus about 23.84% for Chipotle. My opinion is based on Panera Bread's cash flow for the last four quarters of about $118.90 million, versus about $53.80 million for Chipotle. (My cash flow figures are estimates based on operating cash flow minus cash used in investing activities.)
Taking a different approach to comparing these two stocks, it is interesting that Panera Bread shows a growth rate in earnings per share of about 30.31% for the last five years, versus about 36.53% for Chipotle, although Panera's stock price is up about 54.30% from its 52-week low of about $100.26, versus an increase for Chipotle of only about 7.92% from its 52-week low of about $271.53. I believe that this inconsistency could indicate a future slowdown in Chipotle's growth rate in earnings per share.
In looking at the trends, Panera Bread's stock price of about $154.70 is just above its 200-Day moving average of about $152.26, while Chipotle's stock price of about $293.04 is substantially below its 200-Day moving average of about $388.31. This would tend to indicate that Chipotle's stock price has been negatively affected by something, perhaps its less than stellar cash flow results of late.
|Panera vs Chipotle|
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.