Shares of Chipotle (NYSE: CMG) sank 14% in March, according to data from S&P Global Market Intelligence. Restaurants have gone through a rough patch over the last few years, and Chipotle is no exception. Now, investors are becoming bearish across the sector due to fears of rising gas prices and their impact on discretionary purchases, such as dining out.
Here’s why Chipotle stock fell in March, and whether it is worth buying the dip on for your portfolio today.
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Chipotle reported its fourth-quarter 2025 earnings before March, but its results are indicative of the bearish narrative forming around it and the broader restaurant sector, especially fast-casual stocks. Same-store sales dipped 2.5% year over year last quarter, leading to a compression of operating margin from 14.6% in Q4 the year prior to 14.1% in 2025. Both figures moving in the wrong direction indicate a lack of pricing power and the inability to retain traffic at Chipotle locations.
Specific news around Chipotle did not shake the stock in March. However, investors are predicting how rising gas prices will filter through to the rest of the average American’s consumer spending decisions. The bearish thought for restaurant chains is that if people are forced to spend more on gasoline each month, they will likely eat out less and cook cheaper meals at home. This sentiment is what has Chipotle stock falling again in March, along with many other consumer stocks.
With Chipotle, investors are concerned about declining food quality, inconsistent portion sizes, and the loss of market share to fast-casual start-ups like Cava Group. The once king of restaurant growth stocks has now fallen back to earth.
The stock may be down, but that does not mean Chipotle is automatically cheap at today’s prices. The company has over 4,000 restaurants and is slowly expanding worldwide, giving it a long runway for growth. If it can get its same-store sales growth back into positive territory, revenue should keep compounding for the foreseeable future.
However, there is no reason to think this will happen for Chipotle. Traffic has been moving in the wrong direction for years, and despite the stock being down 50% from its highs, it still trades at a price-to-earnings ratio (P/E) of 29.5. This feels much too expensive an earnings ratio for a struggling restaurant concept. Avoid buying the dip on Chipotle stock right now.