NEW YORK (Reuters) - Shares of Chipotle Mexican Grill have surged over 70 percent over the last 12 months, but some U.S. fund managers are waiting for Feb. 6 earnings results to confirm that the burrito-chain is truly back from its 2015 food safety crisis.

FILE PHOTO: The logo of Chipotle Mexican Grill is seen at the Chipotle Next Kitchen in Manhattan, New York, U.S., June 28, 2018. REUTERS/Shannon Stapleton/File Photo

The company’s shares lost nearly 70 percent of their value between October 2015 and February 2018 as it struggled to win back customers after a multi-state E. coli outbreak that was linked to Chipotle in late 2015 and early 2016. Shares have rebounded since their 2018 lows thanks in part to the moves of its new Chief Executive Brian Niccol, the former head of rival Yum Brand Inc’s Taco Bell, to invest heavily in digital ordering and delivery.

Shares of the company are up more than 23 percent since the start of January alone, yet remain well below their record highs of 2015.

“The company is transitioning and is now back on offense versus defense,” said Peter Saleh, an analyst at BTIG.

An increased share buyback and a series of positive earnings surprises helped convince 35 actively-managed U.S. equity funds to add a position in the company in 2018, pushing its total fund ownership up by nearly 36 percent, according to data from Lipper.

Yet for the company to win more converts, it must now show that it can not only expand on its digital offerings but can maintain its profitability despite rising minimum wages that have largely soured U.S. fund managers on restaurants overall, fund managers say. The average actively-managed U.S. equity fund has slightly less than 1 percent of its portfolio in restaurant stocks, or about 16 percent less than the weighting in the benchmark S&P 500, according to Lipper data.

“I like to buy stocks at new highs only because management is proving the fact that they can deliver. We are right at that inflection point where an earnings miss is going to lead to a significant correction and a beat is going to send it much higher,” said Robert Bacarella, portfolio manager of the Monetta Fund.

Bacarella, who does not currently own Chipotle but has in the past, said that he would likely add the company to his portfolio should it continue to beat estimates, despite its high valuation. Chipotle is currently trading at a price to earnings ratio of 78.2, nearly double its 52-week low of 40.8.

The company is expected to report earnings per share of $1.37 on revenue of $1.1 billion in its most recent quarter, according to Refinitiv data.

Barbara Miller, a portfolio manager of the $5.9 billion Federated Kaufmann fund, who does not currently have a position in the company but owns shares of Wingstop Inc, said investors will be watching whether Chipotle can maintain its margins despite a tight labor market and rising minimum wages in states including California, Florida, and New York.

“There’s no question that labor costs will continue to rise and keeping people in what tend to be high-turnover jobs is more of a challenge,” she said.

Chipotle’s move into online ordering and delivery could help it balance out rising labor costs because digital orders tend to have higher tickets, she said. But it will need another year without any food safety scares to win back all of its former customers, she said.

“It’s usually at least a couple of years for a company to restore its reputation but now it could be longer,” she said. “If something goes viral these days it can be hard to live down.”