Fund Manager Summary
The fund managers believe that Guzman Y Gomez Ltd presents a compelling investment opportunity following its IPO, which saw shares rise from $22 to approximately $24.83, marking a 24% increase in just a month. In their opinion, the company benefits from a top-tier management team and strong unit economics, which contribute to a rapid payback period for franchisees. This favorable economic model is expected to sustain ongoing demand for new franchises. Additionally, the fund managers see significant optionality for future growth as the company explores expansion into new regions and concepts, further enhancing its investment appeal.
Source: Trading View
Commentary From The Managers
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ECP Asset Management
6 Nov 2025
$24.43
Summary
- ECP Asset Management was an early investor in Guzman y Gomez.
- Guzman y Gomez is currently trading around $25, above the $22 IPO price, but has experienced volatility.
- Concerns about sales numbers and outlook are viewed as overstated.
- Recent price swings are seen as reactions to short-term signals rather than changes in the core story.
- The Australian business remains the anchor of the company.
- Unit economics are strong, corporate margins have improved, and the pipeline is large, focusing on drive-through formats.
- Like-for-like sales were softer early in FY26, influenced by marketing cadence and a pullback from heavy aggregator promotions.
- GyG’s balance sheet strength is often under-appreciated; the company has significant cash, no debt, and pays a modest fully-franked dividend.
- This financial strength supports continued investment in Australia and measured testing in the US.
- Pricing discipline is a positive aspect, with management favoring value over aggressive pricing strategies.
- Protecting frequency and brand equity is prioritized over chasing quick uplifts.
- The investment thesis focuses on Australia, with management delivering on IPO commitments regarding sales, margin expansion, and store growth.
- Unit returns are attractive, and the rollout strategy is disciplined.
- Brand strength and a value-led offer enhance customer frequency, while digital engagement and drive-through options provide operating leverage.
- ECP remains positive on the long-term opportunity, viewing Guzman y Gomez as a high-quality growth company.
- Resilient fundamentals, a strong balance sheet, and multiple levers for earnings growth create a sustainable path for compounding.
- This combination is considered advantageous for long-term investors.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
ECP Asset Management
6 Nov 2025
$24.43
- ECP Asset Management was an early investor in Guzman y Gomez.
- Guzman y Gomez is currently trading around $25, above the $22 IPO price, but has experienced volatility.
- Concerns about sales numbers and outlook are viewed as overstated.
- Recent price swings are seen as reactions to short-term signals rather than changes in the core story.
- The Australian business remains the anchor of the company.
- Unit economics are strong, corporate margins have improved, and the pipeline is large, focusing on drive-through formats.
- Like-for-like sales were softer early in FY26, influenced by marketing cadence and a pullback from heavy aggregator promotions.
- GyG’s balance sheet strength is often under-appreciated; the company has significant cash, no debt, and pays a modest fully-franked dividend.
- This financial strength supports continued investment in Australia and measured testing in the US.
- Pricing discipline is a positive aspect, with management favoring value over aggressive pricing strategies.
- Protecting frequency and brand equity is prioritized over chasing quick uplifts.
- The investment thesis focuses on Australia, with management delivering on IPO commitments regarding sales, margin expansion, and store growth.
- Unit returns are attractive, and the rollout strategy is disciplined.
- Brand strength and a value-led offer enhance customer frequency, while digital engagement and drive-through options provide operating leverage.
- ECP remains positive on the long-term opportunity, viewing Guzman y Gomez as a high-quality growth company.
- Resilient fundamentals, a strong balance sheet, and multiple levers for earnings growth create a sustainable path for compounding.
- This combination is considered advantageous for long-term investors.
Summary
Centennial Asset Management
8 Sept 2025
$23.77
- Centennial Asset Management notes that Guzman Y Gomez delivered an FY25 result below market expectations.
- Lower share-based payments improved the headline number but diluted the quality of the result.
- Investor focus remains on the growth outlook for the stock.
- The store roll-out target was in-line with expectations.
- YTD trading update and FY26 margin guidance were softer than expected.
- YTD growth in the Australian business has had a slower start to the next year.
- Like for like (LFL) sales growth was well below FY25 levels and market forecasts.
- In the absence of an acceleration in top line growth, the business risks falling short of sales and earnings expectations in FY26.
- The investment and valuation risks at GYG appear to be increasing.
- The competitive environment in the US and Australia continues to intensify.
- Aspirational store count and margin targets are looking challenging.
Summary
Hyperion Asset Management
31 Aug 2025
$25.50
- Guzman y Gomez’s (GYG) FY25 result undershot analyst expectations due to increased short-term overhead investments.
- This was compounded by a weak trading update for the start of FY26.
- Sales per store growth slowed from high-single digits to +3.7% in July/August, cycling a strong period last year.
- Sales growth is expected to rebound later in the calendar year with new product releases and marketing investment.
- The company's rollout continues in line with expectations.
- While the market reacted negatively, we view these surprises as incremental and unimpactful to long-term expectations.
- We appreciate management's focus on delivering a superior value proposition to customers over short-term earnings "beats".
- GYG has a great product, significant white space in Australia, and ample growth levers to pull in the coming years.
Summary
QVG Capital
31 Aug 2025
$25.50
- QVG Capital notes that Guzman y Gomez has experienced a significant decline, losing over a fifth of its value following disappointing FY25 results.
- Recent trading updates indicate same-store sales growth of only +3.7%, which falls short of the expected mid-to-high single digits.
- Concerns arise from weak early sales, ongoing losses in the US market, and potential stock market pressure from newly freed-up shareholders.
- Despite these challenges, QVG Capital believes the Australian operations are poised for rapid earnings growth in the coming years.
- Unlike competitors like Dominos, GYG franchisees typically recover their investment in about two years, indicating robust franchise performance.
- The company is strategically lifting menu prices at a rate slower than inflation, enhancing customer value.
- Continuous product innovation is expected to support stronger same-store sales moving forward.
Summary
Blackwattle Investment Partners
30 June 2025
$28.29
- GYG was one of the largest negative contributors to performance during the month.
- GYG fell 7% in June against a strong market.
- Performance was impacted by weak results from US peers such as Chipotle, Cava, and Sweetgreen.
- There is a looming overhang of potential sell down by founders and early investors post escrow expiry in August.
- GYG is leading the modernization of QSR in Australia, balancing quality, health, and fast service.
- GYG has built a brand supporting a ~200 store network, with plans to grow by 30+ stores annually.
- Expansion includes stores in Singapore, Japan, and trials in the US.
- Franchisee returns are market-leading, driving strong demand for new store openings.
- Scaling a franchisee business model can deliver significant economic value over the medium term.
- The current sell down overhang is viewed as priced-in, with nearly 10% free float short interest.
- Attractive starting valuation multiple and operational execution are noted.
- Blackwattle Investment Partners sees significant upside if the business model is executed at scale.
- The current valuation and risk/reward profile looks highly attractive.
Summary
Blackwattle Investment Partners
31 May 2025
$30.25
- GYG was one of the largest negative contributors to performance during the month.
- GYG fell 6% in May against a strong market.
- GYG delivered another strong quarterly trading update in April, with comparable sales continuing to grow above 10%, reconfirming prospectus forecasts for FY25 will be well beaten.
- Weak performance by US peers such as Chipotle, Cava, and Sweetgreen impacted GYG in May.
- Looming overhang of a potential sell down by founders and early investors post-escrow expiry in August.
- GYG is leading the modernization of QSR in Australia, providing an option at scale for consumers balancing quality, health, and fast service.
- GYG has built a brand in Australia supporting a ~200 store network, forecast to grow by 30+ stores per annum.
- Expansion includes stores in Singapore & Japan and trialing stores in the US.
- Profitability for GYG franchisees is strong, driving demand for new stores in AAA rated site locations.
- Scaling a franchisee business model can deliver significant economic value over the medium term.
- Current sell down overhang has been more than priced-in with almost 10% free float short interest.
- Attractive starting valuation multiple and continued operational execution support the investment thesis.
- Blackwattle Investment Partners views GYG as an 'Early Quality' business with significant upside potential.
- Current valuation and risk/reward opportunity look highly attractive.
Summary
Hyperion Asset Management
28 Feb 2025
$34.60
- Guzman Y Gomez's 1H25 results showed continued strength in top-line growth trends in its core Australia segment.
- Same store sales increased +9.4% over the half, with acceleration in the final quarter.
- Net new openings in Australia were in line with expectations at +16.
- Early indicators for the current trading period are positive, with same store sales at +12.2% for the first 7 weeks of 2H25.
- The company's store pipeline grew well during the half.
- Management identified multiple levers for above market revenue growth over the long term, including new product innovation and network densification.
- Daypart expansion (Breakfast, 24/7) and efficient targeted marketing are also key growth strategies.
- Short-term margin improvement was marginally below market expectations due to mix shifts to value offerings and delivery.
- The US operations are in a very early phase of development and underperformed short-term market expectations.
Summary
Maple-Brown Abbott
25 July 2024
$27.30
- Guzman y Gomez's listing in mid-June marked the largest IPO since 2021.
- The valuation at the $22 listing price was 38 times forecast 2025 EBITDA and 371 times forecast earnings.
- Such high multiples require substantial earnings growth to support share prices.
- Management aims to expand from 185 stores to over 1000 in the long term.
- In comparison, McDonald's took 50 years to reach approximately 1000 stores in Australia.
- Despite a lofty valuation and ambitious growth targets, there was a surprising 36% gain on the first day of trading.
- Maple-Brown Abbott continues to monitor Guzman y Gomez's performance and growth potential.
Summary
Flagship Investments
30 June 2024
$24.83
- GYG is a prominent player in the QSR sector, known for its high-quality Mexican cuisine and innovative approach.
- Flagship Investments continues to hold due to GYG's market leadership in Australia.
- The investment thesis focuses on GYG's store expansion programme.
- Strategic expansion into the US market is also a key component of the thesis.
Summary
Blackwattle Investment Partners
30 June 2024
$24.83
- Guzman y Gomez IPO’d on June 20 at $22 and closed the month up 24%
- Blackwattle Investment Partners continues to hold due to a top-tier management team
- Strong unit economics are being delivered by the company
- This drives a very rapid payback period for franchisees
- Expected to support ongoing demand for new franchises
- Significant optionality for the business with potential expansion into new regions and concepts
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"With a top-tier management team and compelling unit economics, Guzman Y Gomez appears poised for explosive growth. The rapid payback for franchisees could signal a robust demand for expansion, making this investment one to watch closely."
Last Updated: 06 Nov 2025
Query The Data
Frequently Asked Questions
Who is investing in Guzman Y Gomez Ltd (ASX:GYG)?
Fund managers including Blackwattle Investment Partners, Maple-Brown Abbott, Hyperion Asset Management, Flagship Investments, QVG Capital, Centennial Asset Management and ECP Asset Management have invested in Guzman Y Gomez Ltd (ASX:GYG).
Why do fund managers invest in Guzman Y Gomez Ltd?
Fund managers are investing in Guzman Y Gomez Ltd due to its strong unit economics, which ensure rapid payback for franchisees and sustained demand for new franchises. The company's top-tier management team and potential for expansion into new regions and concepts further enhance its attractiveness as an investment.
What happened to Guzman Y Gomez Ltd (ASX:GYG)?
Fund managers are optimistic about Guzman Y Gomez Ltd due to its strong long-term growth potential despite recent fluctuations in sales performance. They note the company's robust unit economics, a solid balance sheet with no debt, and a commitment to maintaining value for customers through gradual price increases. The ongoing store rollout in Australia aligns with expectations, and management's focus on product innovation and customer loyalty is expected to drive future sales growth. While short-term results have been mixed, the overall outlook remains positive, supported by resilient fundamentals and strategic investments.