Guzman Y Gomez shares just sank to new all-time lows. Time to buy?

Guzman Y Gomez (ASX: GYG) shares are sinking today.

Shares in the S&P/ASX 200 Index (ASX: XJO) Mexican fast food restaurant chain closed yesterday trading for $16.00. In early afternoon trade on Tuesday, shares are changing hands for $15.86 apiece, down 0.9%.

For some context, the ASX 200 is up 0.6% at this same time.

Today’s underperformance is par for the course for the struggling restaurant owner and operator.

Indeed, now down 50.8% in 12 months, Guzman Y Gomez shares just fell to new all-time lows (should the price at time of writing be maintained until close).

Even stockholders who managed to take part in the initial public offering (IPO) on 20 June 2024 are in the red now. IPO investors were able to buy shares for $22.00 each. This saw them book a one-day gain of 36.4%, with the ASX 200 stock ending its first day of trading at $30.00 a share.

But after then rising to $43.35 a share by 6 December 2024, it’s been mostly a downhill ride for stockholders since then.

Taking just a little bit of the sting from those losses, the ASX 200 stock paid two fully franked dividends over the past year, totalling 20 cents a share.

So, with shares having halved in a year, and down by 63.4% since the December 2024 record closing high, is the Mexican restaurant chain finally selling for a bargain?

Are Guzman Y Gomez shares now on sale?

Catapult Wealth’s Blake Halligan recently ran his slide rule over the company (courtesy of The Bull).

“GYG is a Mexican themed restaurant chain,” Halligan said.

Pointing to the past year’s painful share price decline, he noted, “GYG shares have fallen from $31 on March 31, 2025 to trade at $16.81 on March 26, 2026.”

Despite that big retrace, and the company’s relatively strong H1 FY 2026 performance in its Australian market, Halligan has a sell recommendation on Guzman Y Gomez shares.

“Although network sales grew 18% to $682 million in the first half of fiscal year 2026, several metrics signal caution,” he said.

According to Halligan:

Segment underlying EBITDA [earnings before interest, taxes, depreciation and amortisation] in the United States posted a loss of $8.3 million. The stock continues to trade on high price/earnings multiples.

The ASX 200 fast food stock released its half year results on 20 February. And with investors apparently more concerned over potential headwinds in the US markets than the growth posted in Australia, Guzman Y Gomez shares closed down 13.9% on the day the results were posted.

Summing up his sell recommendation, Halligan concluded, “In our view, execution risks are rising and margins are under pressure. Investors may find better opportunities by re-allocating funds to alternative investments.”

The post Guzman Y Gomez shares just sank to new all-time lows. Time to buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.