Chipotle Mexican Grill (CMG -2.45%) has been one of the most reliable growth stocks on the market since its IPO in 2006.
With the exception of the three-year period when the company's performance was marred by an E. coli outbreak, Chipotle has delivered solid growth year in and year out.
The company recently announced 50-for-1 stock split, rewarding longtime shareholders with an upcoming reset in the stock price as the stock is more than a 50-bagger since its IPO.
Image source: Chipotle
Chipotle's five-year performance
Over the last five years, Chipotle shares have jumped an impressive 346%. As the chart below shows, much of those gains have come in the last six months or so, helped in part by the stock-split announcement.
A gain of 346% would have turned $10,000 invested in Chipotle five years ago into $44,460 today.
Can Chipotle keep gaining?
Maintaining that growth rate won't be easy for Chipotle stock as it now trades at a lofty price-to-earnings ratio of 68, meaning that future gains in the stock are likely to come from earnings growth rather than multiple expansion.
Additionally, that high multiple puts Chipotle at risk of a pullback if the company's results disappoint.
At this stage of its life cycle, the burrito roller has built a number of solid competitive advantages, including a loyal customer base, a strong digital platform, and execution in the form of its rapid throughput. However, steady growth isn't assured.
Overall, Chipotle still looks like a good bet to continue beating the market, but the soaring performance over the last five years will be difficult to repeat.
