Longs Hold Advantage In Playing Chipotle Following Evening Earnings

Chipotle Mexican Grill (CMG) is due with its Q2 results after the close tonight, and analysts polled by Capital IQ expect the company to report a profit of $2.30 per share on revenue of $706.3 million.

CMG has widened its earnings-driven after-hours trade in next-day regular session play in eight of 17 quarters.

Heading into tonight's quarterly results, shorts may be sidelined until CMG finds a clear direction as the stock has a tendency to see its earnings-driven evening declines reverse direction. Longs hold a slight advantage, historically seeing their earnings-driven after-hours gains bulk up with additional upside in next-day regular session trade.

The stock has declined seven times in reaction to earnings over the 17 quarters for which we have data. It has reversed that move four times. Of the 10 quarterly gains, shares extended that move six times, or 60% of the time.

• On April 19, 2012, CMG edged up 0.9% in night trade after topping Q1 estimates. It reversed direction the next day, closing the April 20 regular session off 2.6%.
• On Feb. 1, 2012, CMG declined 2% in evening trade after missing earnings estimates. The stock recorded the same 2% drop in the Feb. 2 regular session.
• On Oct. 20, 2011, CMG advanced 4% in after-hours trade after beating Q3 expectations. The stock jumped higher the next day, rising 8.3% by the close on Oct. 21.
• On July 19, 2011, the stock fell 3.9% after Q2 mixed results. Shares fell a slimmer 1.1% the next day.
• On April 20, 2011, CMG declined 3.5% in after-hours action despite topping Q1 expectations. The stock added modestly to its negative trade the next day, ending the April 21 regular session down 3.7%.
• On Feb. 10, 2011, CMG surged 8.6% in evening trade after beating Q4 estimates. CMG cut its upside sharply the next day, ending the Feb. 11 regular session up 4.7%.
• On Oct. 21, 2010, CMG gained 4.3% in night trade after topping Q3 estimates. The stock soared higher the following day, closing the Oct. 22 regular session up 14.8%.
• On July 22, 2010, the stock gained 3.2% during extended-hours trading after a Q2 beat. Shares rose a stronger 9.2% the next day.
• On April 22, 2010, the stock was up 5.6% after a Q1 beat. Shares rose a smaller 2.6% the next day.
• On Feb. 11, 2010, the stock fell 3% after an earnings beat but a revenue miss. Shares rebounded to rise 3.7% the next day.
• On Oct. 22, 2009, the stock fell 3.9% during extended-hours trading after Q3 EPS beat and sales were in line. Shares fell a wider 8% the next day.
• On July 22, 2009, CMG declined 1% in after-hours trade after reporting Q2 revenue shy of expectations. The stock turned higher the following day, ending the July 23 regular session with a 3.3% gain.
• On April 22, 2009, the stock jumped 9.6% after the company easily beat year-ago results. Shares fell 0.2% the next day.
• On Feb. 14, 2008, CMG was hit for a 13.2% decline in after-hours trade after coming in shy of Q4 earnings expectations. The downside was trimmed the next day as CMG closed the regular session with a 3.1% decline.
• On Oct. 30, 2007, CMG gained 2.6% in night trade after topping Q3 expectations. It added to its upside on Oct. 31, ending the day with a 4.1% advance.
• On July 31, 2007, CMG firmed 5.2% in evening action on the heels of better-than-expected Q2 results. The stock leaped higher on Aug. 1, rising 12.2% between the bells.
• On May 1, 2007, CMG advanced 5% in after-hours play after blowing past Q1 Street estimates. The stock ballooned higher on May 2, rocketing 17.8% by the close.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.