Chipotle Mexican Grill (NYSE: CMG) investors are worried that hedge fund manager David Einhorn was right when he warned the valuation of the fast-casual, Mexican food restaurant was at "nosebleed" levels and would eventually come crashing down. Considering the precipitous decline following the company's Q3 earnings report, his statements are no doubt on top of minds for investors.

Chipotle's third quarter report showed the company grew revenue at 18.4 percent, from $591.85 in 2011 to $700.5 million in the 3rd quarter of 2012. This fell short of analyst expectations of $702.22 million.

Earnings also fell short of expectations, coming in at $2.27 compared to expectation of $2.30.

Comps came in a 4.8 percent and restaurant level operating margin was 27.4 percent, an increase of 70 basis points from the prior year period. The increase was primarily driven by leverage from higher average restaurant sales.

Chipotle said it expects comps in 2012 to be in the mid-single digits in 2012 and flat low-single digits in 2013, and this could be what really spooked investors, regardless of the hedge fund managers comments.

Chipotle shares are lower by 12 percent after-hours on Thursday.

Earnings Hot Earnings

Cramer Sees Value in Chipotle (CMG) Following Recent Slide on Competition ConcernsOctober 23, 2012 11:37 AM Jefferies Slashes Chipotle Mexican (CMG) Price Target to $215 after Weak Q3, OutlookOctober 19, 2012 8:39 AM Wedbush Downgrades Chipotle Mexican Grill (CMG) to Neutral after Q3 Miss, Disappointing SSS Growth Guidance October 19, 2012 8:27 AM Chipotle Mexican Grill (CMG) Misses Q3 EPS by 3cOctober 18, 2012 4:03 PM Chipotle Mexican Grill (CMG) Gets 'Einhorned' October 2, 2012 11:44 AM