Chipotle Mexican Grill: The $5 Golden Burrito

This fast food chain has found a recipe for impressive profits.

Taco Bell makes a good buck selling the same five cheap ingredients in different combinations for a low price. Chipotle Mexican Grill does the same thing, basically, for a premium price. The extent of Chipotle's ingenuity, though, remains lost on Wall Street. That became clear when the company posted first-quarter earnings earlier this month. It reported profits of 38 cents a share, easily surpassing the average analyst estimate of 32 cents.

Janus Capital analyst Eileen Hoffman says she understands why analysts are underestimating Chipotle. Many Wall Street analysts work on or near, well, Wall Street. They don't quite grasp the Chipotle phenomenon because the stores haven't been in New York City that long. Yet, she says, "there's a 30-minute wait at lunch time" for those restaurants already in Manhattan, "and you can't build them fast enough."

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Bob Frick
Senior Editor, Kiplinger's Personal Finance