Deliveroo PLC, trading under the ticker ROO.L, is a prominent player in the consumer cyclical sector, specifically within the internet retail industry. With a market capitalisation of $2.55 billion, Deliveroo has carved out a significant presence in the online food delivery space across various countries, including the UK, Ireland, France, and several others in the Middle East and Asia.
Currently, the company’s shares are priced at 175.7 GBp, marking the upper bound of its 52-week range (113.10 – 175.70). The stock has demonstrated resilience despite a stagnant price change, reflecting a stable investor sentiment amidst a volatile market environment.
Deliveroo’s valuation metrics paint an intriguing picture. The absence of a trailing P/E ratio and the strikingly high forward P/E of 1,928.23 suggest that investors are banking on future profitability. However, with no PEG, Price/Book, or Price/Sales ratios available, traditional valuation comparisons are challenging. This scenario is not uncommon for companies in high-growth industries where reinvestment and expansion often take precedence over immediate profitability.
The company’s performance metrics reveal a modest revenue growth of 3.40%, indicating a steady expansion in its market operations. Nevertheless, the lack of net income data and an EPS of 0.00 might raise eyebrows among investors focused on profitability. Deliveroo’s return on equity is slightly negative at -0.02%, highlighting the challenges the company faces in converting equity financing into net income. On a brighter note, Deliveroo’s free cash flow stands at £52.13 million, a positive indicator of the company’s ability to generate cash through its operations, which is crucial for sustaining growth and navigating competitive pressures.
Deliveroo does not currently offer a dividend, as evidenced by its 0.00% payout ratio. This decision aligns with its growth-centric strategy, as the company likely prioritises reinvestments over returning cash to shareholders at this stage.
Analyst ratings present a cautious optimism towards Deliveroo, with 2 buy ratings and 11 hold ratings, and no sell ratings. The target price range of 170.00 – 200.00 GBp, with an average target of 180.77 GBp, suggests a potential upside of 2.89%. This indicates a modest but stable growth outlook as perceived by market analysts.
On the technical front, Deliveroo’s 50-day and 200-day moving averages are 151.48 and 144.49 GBp, respectively. The current price hovering above these averages is a positive signal for momentum traders. However, the RSI (14) at 36.94 indicates that the stock is approaching oversold territory, which could suggest a potential buying opportunity for investors who believe in the long-term growth story.
Deliveroo’s journey from its inception in 2013 to its current standing as a multinational online food delivery platform is a testament to its innovative approach and market adaptability. As it continues to connect local consumers, riders, restaurants, and grocery partners across diverse geographies, the company is poised to capitalise on the growing demand for convenient and efficient food delivery services. Investors should keep a keen eye on Deliveroo’s ability to enhance profitability while maintaining its growth trajectory in an increasingly competitive market.
