Guzman Y Gomez: Pre-IPO Report - Attractive Business Model and Growth Prospects but Price Too High

We initiate coverage on Guzman y Gomez, a Mexican-inspired quick-service restaurant operator and franchisor. Following a tremendous sales growth spurt, the QSR is ranked sixth in terms of market share in Australia. However, it is still relatively small in a highly fragmented industry. Major QSR brands like Guzman are consolidating the market, and we forecast that its store network will triple over the next decade.