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The rapid revenue growth over the past decade is Gregs‘(LSE:GRG) shares explodes over the past decade.
Those who invested £10,000 FTSE 250 Back in mid-April 2015, Baker would have seen the stock’s value rise to £15,999. During that period, its stock jumped from £11.33 today to £18.15.
Also, when considering dividends, investors would have made their cumulative profits at £10,157. This represents a total shareholder return ratio of 101.6%.
However, Stormclouds recently gathered at Gregs. That stock fell sharply from its 2024 ending high of £31.84 in September.
Should investors today consider grabbing a slice of sausage roll maker? Or is the company past the optimal date?
The expansion continues
Most of the Gregs stories of the past decade have been one of aggressive expansions and one of the subsequent surges in profits. With 1,650 stores just a decade ago, the business has 2,618 (including 2,057 company-controlled stores and 561 franchise units).
The company probably won’t be surprised, but it has no plans to backtrack it, as it has found a recipe that is right for revenue growth. The opening of a new store in 2024 marked a record annually, with Gregs saying, “Over 3,000 shopsIn the long run, it’s a portfolio.
To make this a reality, we invest a huge amount of money in manufacturing and distribution. In fact, the business believes that two new sites, Derby and Kettering, which are scheduled to open in 2026 and 2027, respectively, will provide ample capacity for around 3,500 shops.
Encouraged, Gregs plans to place more new stores at more transit destinations, moving away from High Street to reflect that pivot. More specifically, we plan to focus on future expansion at travel destinations such as airports and train stations.
The company is preparing to extend its opening hours further across store property and win a lucrative night “going food” market. Greggs also plans to continue investing in its delivery channels following recent impressive deals. Despite the harsh trading environment, delivery revenue rose 30.9% in 2024.
27.6% rebound?
We hope these factors will help Gregs share regain the bounce following the recent heavy dip. Encouraged, dozens of analysts with stock valuations are hoping that prices will rebound over the next 12 months, but forecasts are not uniformly bullish.
One of the most enthusiastic brokers in Greggs’ stocks is surged from £18.15 today to £32.50 over the next 12 months. On the other end of the scale, another analyst believes the bakery will return to £13.30.
However, the average price target is at £23.16. This represents a 27.6% increase from the current level.
Does Gregs share your shopping?
To balance it, I think Greggs’ stock is worth seriously considering following the recent decline in stock prices. It is currently trading at a reasonable price (P/E) ratio of 13.3 times.
It is true that trading terms may remain difficult in the short term as consumer spending remains curtailed. They also face important competition on the High Street and elsewhere.
Reflecting these pressures, Greggs’ similar sales growth cooled from 13.7% the previous year to 5.5% in 2024. But my long-term view of the bakery chain is not hindered. I think Gregs’ stock price will recover sharply as the broader economic situation improves.
