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How Chipotle beat the market: Pro

Chipotle Mexican Grill's assembly-line business model of slinging burritos and carnitas had a banner day on Wall Street. As the much of the market saw increased volatility Friday, Chipotle saw record highs, boosted by much better-than-expected earnings.

Much of the company's solid growth came from its ability to quickly serve long lines of hungry customers during peak rush hours, a concept known as throughput, said Stephen Anderson, a restaurant analyst with Miller Tabak & Co. The efficiency at which customers move through Chipotle lines during busy hours seems to be increasing, he said.

"Chipotle has been doing very well on execution," Anderson said on "Squawk on the Street."

(Read more: Chipotle eyes price hike after strong quarter)

Chipotle reported a 30 percent increase in earnings Thursday, setting up its share price for a more than 13 percent jump on Friday. Chipotle also reported fast-growing same-store restaurant sales, with traffic increasing 9.3 percent in the fourth quarter.

Chipotle Mexican Grill Inc.Patrick T. Fallon | Bloomberg | Getty Images

CNBC's Jim Cramer said Chipotle's strong quarter reflects a cultural shift in the food-service industry. The movement toward whole foods and nongenetically modified products is more than just a trend, and Chipotle is one of a handful of companies who have anticipated the changes, he said.

Cramer called Chipotle's earnings report the "anti-McDonald's" conference call, noting the irony since McDonald's was a major investor in Chipotle's early expansion.

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"This is a conference call that is about my kids," Cramer said. "This is about how we like vegetarian food more than beef and chicken, how we despise the food chain. … This conference call is about the food chain being corrupt and America believes that."

Cramer said Chipotle can raise menu prices to deal with rising food costs without seeing a hit in customer traffic, a move the company plans to pursue.

Anderson agreed with Cramer, but he sees limited upside in the stock going into 2014. He said Panera Bread might make a better bet.

Panera is "in the early stages of implementing their own changes to get more customers in during peak periods," Anderson said. "And that's why that stock is our pick for 2014."

Jon Najarian, a CNBC commentator and co-founder of optionMonster, said Chipotle's venture into pizza and Asian cuisine bodes well for the company. In December, Chipotle announced plans to open a pizza restaurant in Denver modeled after its Mexican eateries.

In 2011, Chipotle also reformatted its service formula for Asian food, opening ShopHouse Southeast Asian Kitchen franchises in Los Angeles and Washington, D.C.

(Read more: Mamma mia! Chipotle plans expansion into pizza)

"These guys are getting more aggressive," Najarian said on "Squawk on the Street." "I like the performance. They just exploded and wiped out anybody who was short."

Anderson cautioned investors on overestimating the new brands. The pizza and Asian restaurants under the Chipotle banner should remain small-growth areas, at least for the next two years, he said.

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street."


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