Is Chipotle Mexican Grill (CMG) Trading at an Attractive Price?

Parnassus Investments, an investment management company, released the “Parnassus Mid Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The Russell Midcap Growth Index fell 7.12% in the first quarter, starting with a continuation of the late 2024 rally but later experiencing a sharp decline. The Fund (Investor Shares) fell -9.98% (net of fees) in the quarter, compared to the Russell Midcap Growth Index’s -7.12% fall. Stock selection in Consumer Discretionary and Industrials contributed to the relative performance, while Communication Services and Health Care detracted. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Parnassus Mid Cap Growth Fund highlighted stocks such as Chipotle Mexican Grill, Inc. (NYSE:CMG). Chipotle Mexican Grill, Inc. (NYSE:CMG) owns and operates Chipotle Mexican Grill restaurants. The one-month return of Chipotle Mexican Grill, Inc. (NYSE:CMG) was 8.50%, and its shares lost 7.32% of their value over the last 52 weeks. On July 3, 2025, Chipotle Mexican Grill, Inc. (NYSE:CMG) stock closed at $57.07 per share, with a market capitalization of $76.894 billion.

Parnassus Mid Cap Growth Fund stated the following regarding Chipotle Mexican Grill, Inc. (NYSE:CMG) in its Q1 2025 investor letter:

“We also added four competitively advantaged, highly profitable and market-share-gaining companies whose stocks had sold off due to what we view as transitory issues. Chipotle Mexican Grill, Inc. (NYSE:CMG) continues to gain share in fast casual thanks to its strong value proposition.

Chipotle is a leader in the fast casual dining category, bolstered by its strong brand affinity and value proposition. We were able to buy the stock at an attractive price after it retreated from recent highs due to concerns around consumer spending.”

Jim Cramer on Chipotle Mexican Grill (CMG): “I Think Chipotle's Making a Comeback”

A chef plating up a wide variety of dishes for a restaurant chain.

Chipotle Mexican Grill, Inc. (NYSE:CMG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 78 hedge fund portfolios held Chipotle Mexican Grill, Inc. (NYSE:CMG) at the end of the first quarter, which was 83 in the previous quarter. In the first quarter of 2025, Chipotle Mexican Grill, Inc.’s (NYSE:CMG) sales grew over 6% to reach $2.9 billion. While we acknowledge the potential of Chipotle Mexican Grill, Inc. (NYSE:CMG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Chipotle Mexican Grill, Inc. (NYSE:CMG) and shared the list of best consumer discretionary stocks to buy. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of CMG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.