Guzman y Gomez Limited (GYG) reported solid quarterly results for Q1 FY25, with total network sales reaching $278.8 million, a 20.7% increase year-on-year.
However, despite the strong performance, GYG shares fell by 3% to $37.40 in early trading.
The decline in share price can be attributed to the company's growth rate slowing compared to the previous year's 32.8%.
Although the Australian segment saw a commendable 21.1% increase in sales to $260.2 million, driven by strong delivery performance and successful marketing campaigns, the growth was slightly below market expectations.
Analysts have also raised concerns about potential overvaluation of GYG shares, with Goldman Sachs initiating coverage with a "sell" rating and a price target of $33.20, implying a potential downside of approximately 15.5%.
Despite the share price dip, GYG remains optimistic about meeting its full-year prospectus forecasts, with plans to open 31 new restaurants in Australia by the end of the financial year.
Investors will be closely watching GYG's performance in the coming quarters to see if the company can sustain its growth momentum and address market concerns.
