Moomoo Down Under wrote a post · Jun 19 23:29

Guzan y Gomez shares open 36% higher than listing price

Australian Mexican fast food chain Guzman y Gomes (GYG) went live on the ASX today at 12:00pm, with shares opening 36% higher than their IPO listing price.

Currently $Guzman y Gomez Ltd(GYG.AU)$ shares are trading at around $30 under conditional trading, compared to their initial listing price of $22.

Source: Behance

GYG is a cult classic in Aus, despite only opening their first store in 2006. With their icon status and management's store growth plans, their debut on the ASX has been a hit.

However, there is some criticism from analysts that the company has very little margin. When looking at their past earnings, in FY 2023 they reported a revenue of $259 million and an after tax profit of $3 million, representing a profit margin of 1.16%. (Motley Fool).

Additionally, in FY 2025, a revenue of $428.2 million is forecasted, plus an after tax profit of $6 million, resulting in a profit margin of just 1.4%.

Despite this, investors are still valuing the company at $3 billion - forecasting a P/E of 500x in FY 2025.

Let us know your thoughts on this stock, or even comment your order!

The Down Under admin gets mild veggie nachos with chipotle mayo and lettuce (no capsicum...)

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