There are many causes buyers like Greggs (LSE: GRG), from its massive buyer base to a confirmed enterprise mannequin. The truth is although, that Greggs shares have carried out badly of late. The price has crashed 23% up to now 12 months and is now 10% decrease than it was 5 years in the past.

As a affected person investor with a long-term investing timeframe, that has grabbed my consideration. May now be the time to purchase?

Right here’s what’s behind the autumn

Final month, the baker introduced full-year gross sales grew 11% to over £2bn. It additionally opened a document variety of new outlets through the 12-month interval. And it mentioned it expects final 12 months’s outcomes to fall inside Metropolis expectations.

That every one sounds fairly optimistic. So what has been happening with the share price? The principle issues, as I see it, relate to not how Greggs has been doing however what its medium-term future prospects are.

Becoming out these outlets takes cash, for instance, and Greggs ended the 12 months with £125m of money versus £195m on the identical level a 12 months beforehand.

With plans for 140-150 new outlets, even permitting for ones which are closing, this 12 months appears to be like set to be one other considered one of Greggs rising its property. That takes more cash.

In the meantime, the corporate pointed to greater employment prices this 12 months resulting in inflation.

Pondering for the long run

Nonetheless, as the corporate factors out, it has been spending cash to assist what it describes as an bold progress plan. It says the long-term alternative for the enterprise stays “significant”.

I agree. There’s nonetheless numerous room for enlargement within the retailer property within the UK alone. Past that, opening longer hours to serve a wider vary of meal events might be one other progress alternative. Greggs has been doing that extra over latest years, however I feel there may be nonetheless untapped potential.

The model is powerful and I feel the chain has a singular worth proposition in a meals market that’s seemingly going to be resilient over the long run, albeit declining numbers of individuals on some excessive streets might require additional reshaping of the store property.

However for now, the market appears extra targeted on the dangers than the potential ongoing progress story. Greggs shares have now fallen to a stage the place they commerce on a price-to-earnings (P/E) ratio of 16.

This can be a high quality enterprise I’d be completely satisfied to spend money on if I might purchase at a beautiful price. So are Greggs shares at the moment priced cheaply sufficient for me to make a transfer? No.

I see an ongoing danger this 12 months on account of greater wage prices and that might eat into earnings. In the meantime, gross sales progress slowed on the finish of final 12 months and I see a danger {that a} weak economic system might harm gross sales progress this 12 months.

Though Greggs shares have grow to be cheaper, for now I’m nonetheless holding off shopping for. I’m maintaining a tally of the share price and firm efficiency although. If the price retains falling I can see it probably hitting a stage the place I’d fortunately purchase for the long run.