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Chipotle’s Charge Ups PubCo Valuations

The value of Orange County’s 46 largest publicly traded companies rebounded in the past year, with a cumulative 19% increase in those companies’ market capitalizations for the year ended March 25.

The combined valuation of those 46 OC companies didn’t quite keep up with the S&P 500 Index, which jumped 31% during the same period. Still, the $241.9 billion cumulative market cap of the 46 companies on this week’s Business Journal list is about equal to Kenya’s gross domestic product (GDP).

It’s a much better performance than last year’s list, when the companies on the list reported a 22% decline from 2022 levels.

2022’s cumulative market value of $261.4 billion for OC’s top public companies is the highest-ever figure for the Business Journal’s annual list, which tracks the largest publicly traded companies with headquarters in Orange County.

The list, with a cutoff of $100 million market cap, includes companies traded on the New York Stock Exchange, Nasdaq or over-the-counter exchanges.

Twenty-seven companies now have a market cap above $1 billion, compared with 25 on last year’s list and 30 the year before.

Irvine once again dominated the list as the headquarters of 21 companies, followed by Newport Beach and Santa Ana with four each.

King Chipotle

The biggest reason for the increase was No. 1 Chipotle Mexican Grill Inc., which boosted its market cap by $33.9 billion to $81.4 billion.

The Newport Beach-based company (NYSE: CMG) is now the nation’s third most valuable restaurant chain, following McDonald’s and Starbucks.

Chipotle’s gain in valuation over the past year is larger than the market value of every other company on the list, except for No. 2 Edwards Lifesciences Corp. (NYSE: EW), the Irvine-based maker of heart stents.

Factoring out Chipotle, the other 45 firms on the list saw just a cumulative 4% boost in valuation, compared to 2023’s list.

The restaurant firm believes it has plenty of room to grow further.

“I think the brand’s got a lot of upsides in it,” Chief Executive Brian Niccol told analysts on a February conference call.

Since Niccol moved the headquarters from Denver to Newport Beach in 2018, the company’s shares have risen twelvefold; Niccol in 2020 won a Business Journal Businessperson of the Year award; its shares have more than tripled since then.

Top 5

Prior No. 1 Edwards Lifesciences rebounded this year with a 13% increase to $56.5 billion, after seeing its market cap decline 33% on last year’s list.

Its gains over the past year, combined with Chipotle, represented about 104% of the list’s increase in market cap. Overall, 24 companies on the list saw their market caps increase while 21 experienced a decline.

Declines were seen for the remainder of the top 5 on the list.

No. 3 Skyworks Solutions Inc. (Nasdaq: SWKS), an Irvine-based manufacturer of semiconductors, fell 5.4% to $16.8 billion as the chip industry experienced a slowdown in demand.

No. 4 Rivian Automotive Inc., the Irvine-based electric vehicle maker (Nasdaq: RIVN), last year appeared ready to rebound from 2022 when its market cap plummeted. While the company’s market cap rose in 2023, its production forecast for 2024 disappointed investors, who sent the shares down in the first quarter this year. On the Business Journal’s list, its market cap fell 18% to $10.6 billion.

No. 5 Masimo Corp.’s (Nasdaq: MASI) market cap declined 24% to $7.4 billion. The Irvine-based maker of noninvasive medical devices may sell its consumer unit to stave off a proxy battle (see story, page 1).

Notables

• The biggest percentage increase in valuation was 288% at drugmaker Tarsus Pharmaceuticals Inc., which now sports a $1.3 billion market cap (Nasdaq: TARS).

The Irvine-based company last July won Food and Drug Administration approval for Tarsus’ medication called Xdemvy, a name that stands for X-ing out the Demodex blepharitis disease that causes mites in eyes. The drug, a teardrop administered twice a day for six weeks, is the only FDA-approved medication to treat a disease that affects 25 million eye care patients in the U.S.

The company proved the necessity of the medication as its fourth-quarter revenue exploded to $13.1 million, up 589% from the third quarter when it was introduced.

• The second biggest increase on the list was RxSight Inc. (Nasdaq: RXST), which climbed 216% to $1.8 billion market cap. The Aliso Viejo-based company makes cataract lenses that can be corrected after surgeries, something no other company can do.
RxSight, which went public in 2022, is currently the most valuable public company in OC’s vital ophthalmology industry.

• The third biggest increase was 213% to $2.3 billion at Banc of California Inc. (NYSE: BANC). When the Santa Ana-based bank acquired PacWest Bank last year, its market cap was around $800 million. Banc’s CEO Jared Wolff at that time told the Business Journal that it would take a few months for Wall Street to realize its true value. Its increased market cap helped it climb from No. 29 to No. 16.

The acquisition helped the bank report the list’s second biggest revenue jump, 359% to $1.5 billion. It also had the second biggest increase in OC employees, 55% to 630. While the bank reports its official headquarters as Los Angeles, Wolff said it’s keeping its Santa Ana office as an unofficial headquarters as well.

Combined Results

Combined, the 46 companies on the list saw their revenue increase 9.3% to $69.4 billion.

The combined companies reported a loss of $4.3 billion. Stripping out the $5.4 billion loss reported by Rivian, they would have reported a profit of around $1.1 billion. The local public companies saw their assets rise about 20% to $182.4 billion.

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.
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