Chipotle Mexican Grill (CMG) was once the poster child for explosive growth in the restaurant industry. From 2010 to 2024, its stock soared an astonishing 3,800%, delivering a compound annual growth rate (CAGR) of 28.8%. Investors who rode the wave turned modest stakes into life-changing fortunes.
Yet, the picture has darkened dramatically, as shares have shed 52% of their value from the 2024 peak. Today, CMG trades roughly 11% lower year-to-date and 34% below levels from a year ago. Can the fast-casual giant recover its mojo or has it become a hopelessly lost cause? Two billionaire investors — Bill Ackman and Daniel Loeb — offer diametrically opposed answers, leaving Wall Street to wonder which titan sees the future more clearly.
The Ingredients Behind Chipotle's Epic Run
Several factors propelled Chipotle’s historic run. The company perfected the fast-casual model: fresh, customizable Mexican fare made with responsibly sourced ingredients, no freezers or microwaves, and a cult-like following. Under visionary leadership, it scaled from a handful of locations to more than 3,000 restaurants while pioneering digital ordering, loyalty programs, and high-margin drive-thru lanes. Same-store sales growth averaged double digits for years, margins expanded, and the brand became synonymous with quality and convenience. Investors rewarded this consistency with premium valuations, pushing the stock to dizzying heights.
Why the Stock Has Fallen So Hard
The reversal over the past two years has been brutal. Comparable restaurant sales turned negative in 2025, falling 1.7% for the full year as transaction counts dropped nearly 3%. Customers, squeezed by inflation and higher menu prices, began trading down or skipping visits altogether. Competition from other fast-casual players and even quick-service giants intensified.
Chipotle’s once-lofty valuation — built on perpetual growth assumptions — suddenly looked expensive when growth stalled. Revenue still rose 5.4% to $11.9 billion thanks to new openings, but organic momentum evaporated. The stock’s 12-month decline and ongoing softness reflect these pressures.
Billionaire Bets: Ackman Exits, Loeb Enters
Hedge funds must disclose equity holdings quarterly via 13F-HR filings, offering rare glimpses into billionaire thinking. In their latest Q4 filings, Bill Ackman’s Pershing Square Capital Management and Daniel Loeb’s Third Point delivered polar-opposite verdicts on CMG.
Ackman had been one of Chipotle’s biggest believers. At the end of Q3 2025, Pershing Square owned approximately 21.5 million shares. With the stock closing at $39.19 that day, the position was worth roughly $842 million. Yet in the Q4 13F, Ackman revealed he had sold every single share. The move marked a complete reversal from what had for many years been his fund’s largest holding.
Conversely, Daniel Loeb’s Third Point took the opposite stance. Its Q4 filing showed a brand new 4.7 million-share position in Chipotle, valued at approximately $175 million at quarter-end. Among the 11 new positions Loeb initiated during the period, CMG was the largest by far, signaling strong conviction that the stock had become undervalued.
Bottom Line
While Wall Street has a consensus "Moderate Buy" rating on CMG stock and a $44.97 median price target, implying 38% upside potential, Ackman made the right investment decision. By selling his entire stake near $39, he locked in gains before the shares slid further to current levels around $32.50. Persistent negative transaction trends, flat-to-down comparable sales guidance for 2026, and a still-elevated valuation relative to slowing growth validate his caution.
Loeb’s fresh bet, while bold, has already moved against him in the short term and carries higher risk if consumer spending remains pressured. Chipotle’s long-term expansion story remains intact, but near-term headwinds suggest patience is warranted, making Ackman the clearer winner in this billionaire showdown.
On the date of publication, Rich Duprey did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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