My prediction for the longest time was that Chipotle Mexican Grill (CMG) would struggle to hold $400 and in fact had no reason to maintain that level based on the protracted rebound and the likelihood that the concept would never reclaim the original business momentum. The company reported the following numbers for Q3:Reports Q3 (Sep) earnings of $0.56 per share, excluding non-recurring items, $1.06 worse than the Capital IQ Consensus of $1.62; revenues fell 14.8% year/year to $1.04 bln vs the $1.09 bln Capital IQ Consensus. The decrease in revenue was driven by a 21.9% decrease in comparable restaurant sales (modestly below estimates), including a reduction of 0.8% on comparable restaurant sales resulting from deferring $11.5 million of revenue related to unredeemed awards from the Chiptopia Summer Rewards program that ran during the third quarter of 2016, partially offset by sales from new restaurant openings. Comparable restaurant sales declined primarily as a result of a decrease in the number of transactions in our restaurants, and to a lesser extent from a decline in average check. Restaurant level operating margin was 14.1% in the quarter, a decrease from 28.3% in the third quarter of 2015. The decrease was driven primarily by sales deleveraging (including 0.9% from the Chipotle revenue deferral) and an increase in marketing and promotional spend which totaled 4.8% of revenue for the third quarter of 2016 compared to 2.4% of revenue in the third quarter of 2015.The numbers were ugly, ugly, ugly. While most of curse expected bad numbers, the problem is that the stock trades at 40x 2017 EPS estimates of $10. The question is whether Chipotle will even hit these numbers as the concept continues to miss targets. The question though is why pay up for these weak numbers. The stock is trading down to around $395 in after hours. Chipotle is still in no mans land until the stock breaks below $390 or breaks out above $430 or so. Disclosure: No position