Where Is Chipotle Headed?

The story:

• The fast-casual dining market did $34.5 billion in sales in 2013.
  
• Chipotle did $3.2 billion in sales in 2013.
  
• This implies Chipotle holding 9.2% market share.
  
• The fast-casual market is projected to grow to $50 billion in 2018.
  
• If Chipotle just maintains its 9.2% share, that gives it $4.6 billion in sales in 2018.
  
• The market expects more though. 
  
• Expectations are for $7 billion in sales for 2018 implying 14% market share.
  
• Maintaining a 10.2% net margin outs net income at about $715 million.
  
• The market most likely will not be paying a 50+ earnings multiple for this story by then.
  
• Let’s assume Chipotle rings up $7 billion in sales in 2018 and holds net margin at 10.2%.
  
• Let’s also assume that share count stays flat. Reasonable given management’s track record. 
  
• At 40X earnings the company would have a market cap of $28 billion.
  
• With 31 million shares outstanding, that would peg the stock price at around $900.
  
• Of course it could be more, it could be less, this is all just rampant speculation and assumption.
  

The question:

• So is Chipotle expensive today? Fair? Cheap?
  
• Would you buy shares of Chipotle today? Is it a market beater from today’s price?