@Strawman it's a great example of insto logic. Pile onto Hamish Douglass for investing in this silly mexican restaurant chain thing, force him and Magellan to divest their share at peanuts to the eventual IPO price, but then pile into the IPO convinced that it's a good bet!

@Strawman charts, trends, broker reccs only get you so far for so long (and my hat off to you if you can trade that), but for my money, there is no substitute for fundamental valuations of a business, whatever method you choose.

For one who rarely eats fast food, I do enjoy their quesadillas, but so far, not their stock!

ha @Bushmanpat

And this is the so-called "Smart money"

Australian Segment Underlying Earnings Before Interest Tax Depreciation & Ammortisation As A Percentage Of Network Sales is a new one for me. Hell of an acrocnym - ASUEBITDAAAPONS.

@Noddy74 If you squint a bit it reads as AUSBITDISAPPOINTS. Its my mid week work lunch pick me up though, Im doing my bit.

Has anyone tried Zambrero’s? We were Guzman fans until recently. I think Zambrero’s is better, their salads anre nicer and they cater better for allergies. I think there’s a good chance Zambrero’s could come in and eat Guzman’s enchiladas (or is that lunch?)! :D

+1 @Rick, another reason why the previous val was nuts -- their competition does it better!

Dont @ me those that disagree. ;)

I agree @mikebrisy -@Rick et al. Our family like their burritos, had one yesterday actually, but thought the company was way-overhyped when they listed, and likely to disappoint investors in years two and three, so never invested in them. It's not the next MacDonald's in my opinion. GnG's food is far better than Maccas but there are just too many Mexican food options here in Adelaide and I suspect elsewhere, like Zambreros and Salsas.

My son started off preferring Guzman n Gomez but now only buys mexican food from Zambreros because he reckons it tastes better. Not sure that GnG's fresh and green message is resonating, because they basically use the same ingredients and packaging that the others do. Just my own opinion, FWIW.

I looked into Salsas, it's a chain owned by the people who started Boost Juice and they also own Betty's Burgers and a couple of other brands. That's a private company so not an investment option, but I reckon Boost Juice is a superior business to many other fast food chains. Particularly when they're integrated into service stations where the staff can prepare the drinks as well as sell the fuel and everything else. A lot of companies are doing that now but with Subway, Mex food, etc, there's a lot of prepared salads and cooked meat and stuff that has to be on display in Subway's case and kept at the required safe temperatures, whereas Boost Juice ingredients are not on display and are mostly kept in the fridge and freezer and only need to be taken out when preparing an order. And when do people say no to a smoothie? Especially when you think it's a healthy option. I've read that the margins on Boost Juice are higher too. I imagine they would be.

I'm surprised they are sticking with the US. They have been there for almost seven years and have eight outlets in Chicago. If it hasn't worked by now it's probably not going to. Food businesses are very hard to take across borders.

To put the US expansion in perspective, here is how the Australia rollout played out. By this point they had ~36 restaurants, and that was from a standing start.

The US just seems like a distraction at this point.

Not to mention the cash they are burning in America.

There is so much amazing real Mexican and Tex Mex all over the US, you have to wonder how they think they are going to capture market share from that. I can only think they are hoping to go for 'chain consistency' but I'm not sure that is going to be a winner over there. I wouldn't be choosing it over the local places, that's for sure.

@Rick I kept Zambrero in business in 2014 during my specialty exams. 12 month period I counted close to 200 burritos. Didn’t gain weight either, lost it. (few confounders in their no doubt)

sadly no drive through’s apart from WA.

funnily enough was created by a med student who couldn’t find any fresh takeaway.

Easy to say in hindsight I suppose, but how was an Australian franchise taking Mexican food to the US ever going to be a successful growth strategy?

It's similar to Starbucks trying to enter Australia. Australians drink coffee, and we make lots of coffee, should be amazing. Aus and US are so different for food though, value and quality expectations and the economics of produce and staff are miles apart. It was a big swing. On top of that you're trying to sell ice to the Inuit, as you've alluded to @PhilO. I feel like it has more to do with the CEO being a US native than anything else. (Having said all of that, if they'd have taken off in the US it would have been monumental and he'd be a genius).

Nice example @Lewis. I think Guzman entering the US was particularly mind boggling given the relative scale of the expansion compared to their homeland. Starbucks move to Australia was relatively tiny. A fund manager told me at the time of a rumour that one reason Starbucks expanded here was because individuals in management wanted an excuse to visit occasionally.

Another example I thought was particularly funny was American Dominos once trying to expand to Italy. Again easy to say in hindsight. But how was that ever going to work.

@PhilO I think it is just the standard expansionist dream of 'The US is the biggest consumer market and if we could just get a fraction of it....' without adequately considering the actual likelihood of capturing any meaningful share. Might be some of that 'management wants to travel to the US on the company dime' that you identified with Starbucks too.

Yeh. For sure. It’s just that Guzman was actually priced like the expansion was likely to work. Investors were weighing the probability of success highly in the multiples they would pay.

@Strawman I remember you quoting Benjamin Graham Price is what you pay & value is what you get.

I again went back to my mistress (gemini) my wife calls gemini mistress because i talk to it more than what i talk to her :)

I did a scenario anlsyis with & without us business & came up with this valuation.

Justification for Each Multiple

1. The Conservative Multiple (15.0x)

• The Justification: This multiple aligns GYG with mature, highly reliable Australian Quick Service Restaurant (QSR) peers like Collins Foods, and sits right at the global QSR industry median (14.2x - 15.5x).
• The Scenario: You use this multiple if you believe the "easy growth" is over. Same-store sales growth flattens to 2-3% (matching inflation), and the 40-store-per-year rollout becomes delayed by high construction costs and site scarcity. At 15x, you strip out all "hype" and value GYG strictly as a standard, mature food retailer.

2. The Current Market Multiple (19.1x)

• The Justification: This is the literal math of where the stock is trading today at ~$17.50, assuming the market is pricing the consolidated group.
• The Scenario: The recent 30% drop in the share price has aggressively "derated" the stock from its IPO highs. At 19.1x, the market is acknowledging the 30% Australian profit growth, but has severely discounted the U.S. narrative. Interestingly, this multiple is slightly above where Domino's Pizza Enterprises historically trades (18.5x), suggesting the market still views GYG as a superior growth vehicle to Domino's, but the U.S. drag is heavily anchoring the actual share price to the $14.50 - $17.50 range.

3. The Realistic Multiple (21.0x)

• The Justification: This multiple reflects a "Growth Premium" reserved for high-quality companies expanding profits rapidly (GYG's underlying APAC profit grew 25%+ in 1H26) while maintaining zero debt.
• The Scenario: You use this multiple if you trust management's pipeline. 85% of their upcoming Australian sites are highly lucrative drive-thrus (which command 22% margins). A 21x multiple gives them credit for having a massive, highly profitable, and unpenetrated runway in Australia over the next 5 to 7 years, completely independent of whatever happens in the United States.

4. The Optimistic Multiple (25.0x)

• The Justification: This is the "Category Killer" multiple. It mirrors the long-term historical averages of global juggernauts like Chipotle (which often trades between 22x and 28x EBITDA).
• The Scenario: You use this multiple if you believe the 1,000-store Australian target is a mathematical certainty. It assumes that GYG possesses an impenetrable "moat"—meaning they can continually raise prices without losing foot traffic, and that franchisee demand remains so high (currently offering a 48% ROI) that the company can fund its entire aggressive expansion using franchisee capital rather than its own cash.

The Bottom Line

The true danger of the US expansion is hidden in the Optimistic scenario. Even if you assign a premium 25x multiple to GYG because the Australian business is flawless, that same multiple turns the US cash burn into a $4.00 per share penalty. This mathematical reality explains exactly why the stock is struggling to reclaim its $20+ highs.

I still believe GYG is a good company,some anectodal evidence to cionsider

While financial data is critical, I believe there is strong anecdotal evidence supporting the long-term growth of Guzman y Gomez (GYG), particularly regarding its appeal to diverse demographics and its dominance in the delivery ecosystem.

Another thing dont hate me for this- this is urely anecdotal this is a bet on migration & ofciurse the counter thesis as the migration increase niche indan resturants also increases, my favourite is GYG is not because it is the best, its because given the limited choice its the king.

The "Burrito & Bikes" Investment Thesis

1. The "Final Boss" of Dietary Moats

Usually, if an Indian restaurant is open, a South Asian family goes there. It’s the law of nature.

• The Reality: You (a tech-lead and mechanical engineer) are choosing GYG over your "home" cuisine.
• The Investor Take: If GYG can break the cultural "gravity" of traditional ethnic dining, their brand power is massive. They’ve moved from being "Mexican food" to being "The Default High-Quality Fuel" for the demographic that knows food best.

2. The "Student-Savant" Logistics Theory

You noticed an army of international students (the backbone of the Australian delivery economy) parked outside GYG. You didn't just look—you interviewed them.

• The Discovery: These drivers confirmed they wait at GYG because that’s where the volume is.
• The Investor Take: In 2026, the best way to judge a restaurant’s health isn't by looking at the dining room; it’s by looking at the sidewalk. If the delivery guys (who are paid by the minute) treat your local GYG like a high-yield gold mine, it means the Order Velocity is crushing the competition.

3. The "Linear Kitchen" Secret Sauce

• The Comparison: At an Indian restaurant, a curry takes time to simmer. At McDonald's, the drivers often get stuck in the "delivery purgatory" corner.
• The GYG Edge: Their "double-linear" kitchen (the assembly line) is basically a mechanical engineer's dream. It’s built for throughput. Drivers know they can "churn and burn" more orders per hour at GYG, which makes the store a natural magnet for the Uber Eats fleet.

The Simple Summary

If the "Wall Street of the Pavement" (the drivers) is betting their hourly wage on waiting at GYG, and the "Expert Consumers" (your family) are choosing it over traditional options, the company has a "double-shot" of growth potential.

One is winning the logistics war, and the other is winning the cultural preference war.

Looking forward to your counterthesis @Strawman @mikebrisy all other members

GYG management has always pushed EBITDA...

A real expense in physical retail is rent. Using the EBITDA figure purposefully excludes this cost. It's not like this cost will ever disappear!

I think your multiples are fine if applied to a P/E ratio not EV/EBITDA.

I cant argue that GYG doesn't have genuine traction, younger guys at my work love it. Just never seen the value in the stock and looked like a classic offload from institutional owners to retail.

Mate, you make a fantastic point about the dangers of the AASB 16 lease standard. In physical retail, capitalizing rent as a "Right-of-Use" asset to artificially inflate Statutory EBITDA is the oldest accounting magic trick in the book. You are 100% right that rent never disappears.

However, if you dig into the actual cash flow mechanics and reporting for Guzman y Gomez

GYG operates a heavy franchise model. While GYG often holds the "head lease" on a drive-thru to maintain ultimate control of the prime real estate, they sub-lease it to the franchisee. The franchisee is the one physically paying the rent out of their own pocket. For the majority of their network, the rent expense is a complete pass-through and has zero net impact on GYG's corporate cash flow

If you look at the literal reconciliation table in their recent HY26 report, they do exactly what you are asking for:

• Statutory EBITDA: $40.9 Million (This is the inflated AASB 16 number where rent is hidden).

• Less AASB 16 Leases: -$10.8 Million (This is management actively DEDUCTING the cash rent they paid).

• Other Adjustments: +$2.9 Million

• Group Underlying EBITDA: $33.0 Million

I agree in principle that ebitda does hide many thingsd

@Raseekingalpha I don't have a thesis for $GYG. It is not an industry or business I have spent a lot of time on.

I do consider that the price run up after IPO assumed flawless execution into the US, and I think it is far from a given that the business will achieve the implied level of success in that market. Who knows (I don't) maybe they will, but on a risked basis, I think the SP got way over-heated.

I don't have a view on current valuation of this business.

Disc: Not held