Guzman Y Gomez Ltd (ASX: GYG) shares have been a revelation since landing on the ASX boards in June 2024.
Despite listing on sky high multiples and being described by many as extremely expensive, the quick service restaurant operator's shares have defied the odds and delivered big returns for those that believe in its bold burrito ambitions.
But the company's IPO was heavily oversubscribed and getting hold of Guzman Y Gomez shares was near impossible for the average investor.
So, what about if you had bought shares six months ago? Would it have been a good idea to invest $10,000 into the company back then? Let's find out.
$10,000 invested in Guzman Y Gomez shares 6 months ago
Back in early to mid-August of last year, investors would have been able to snap up the company's shares for $30.00 apiece.
This means that with a $10,000 investment, you could have picked up 333 shares and had $10.00 leftover to buy a burrito for lunch.
Since then, it has been largely onwards and upwards for Guzman Y Gomez's shares, much to the delight of its shareholders.
In fact, the gains have continued on Tuesday, with the fast food chain climbing 1.5% to $40.10 during today's session.
This means that those 333 shares now have a market value of $13,353.30. That's over $3,350 more than you started with and represents a return on investment of approximately 33.5%.
And that's despite the company's shares pulling back from the record high they set in December of $45.00.
What's next?
The last six months have been incredible, but what lies ahead for shareholders? Let's see what analysts are saying about the high-flying stock.
Unfortunately, the broker community appears to believe that Guzman Y Gomez's shares are now largely fully valued.
For example, while Morgan Stanley has an overweight rating on them, its price target of $38.50 implies potential downside of approximately 4% for investors.
Elsewhere, UBS, Ord Minnett, and Morgans all have the equivalent of hold ratings on its shares with price targets of $40.00, $41.00, and $41.40, respectively.
The highest of these price targets suggests that upside potential of just 3.2% is possible over the next 12 months.
Finally, Goldman Sachs has a sell rating and $33.20 price target, which implies potential downside of 17% for investors.
It warns that it has "a stretched valuation that has inappropriately, in our view, been pegged to the highest growth US-peers without taking into consideration the market differences and risks associated with an aggressive store expansion."
Food for thought for shareholders.
