Chipotle (CMG) has performed exceptionally well this year. The stock is up more than 50% year-to-date, significantly outperforming the market indices. In the last six months the stock climbed 25%, while the Dow Jones remained flat.

Investors are increasingly bullish about this restaurant chain. However, the current rally might have just pushed the envelope, and we expect this optimism will fade. Chipotle competes mostly with the quick service and casual dining companies such as Chili's, McDonald's (MCD), Burger King, Yum! Brands (YUM) and Papa John's, among others.

The number of Chipotle restaurant outlets has surged from 700 in 2007 to about 1,200 currently. However, this expansion did not come as a surprise. This year the company expects to add about 145 restaurants -- only slightly more than our estimate of 140. In the chart below, you can see our forecast for the number of Chipotle restaurants. (Note that you can drag the trend line to arrive at your own, customized stock price.)

The company also opened its first Asian-cuisine restaurant, ShopHouse Kitchen, in Washington DC. It's yet to be seen whether consumers like the idea of their favorite Mexican restaurant serving them Asian cuisine. Going forward, we also believe the profitability might be affected due to high commodity prices, capital expenditure and increased marketing costs to create brand awareness.

Part of the company's expansion plans are to open more restaurants in Europe. The company opened its first outlet in London earlier this year and soon aims to open one in Paris. However, with the European debt crisis still looming large, these expansions might take a backseat for the time being.

We have a $321 price estimate for Chipotle, which is about 5% below the current market price.

See our complete analysis for CMG stock here.