Delivery Hero (ETR:DHER) Shareholders Booked A 82% Gain In The Last Year

By
Simply Wall St
Published
May 04, 2020
XTRA:DHER

If you want to compound wealth in the stock market, you can do so by buying an index fund. But if you pick the right individual stocks, you could make more than that. To wit, the Delivery Hero SE (ETR:DHER) share price is 82% higher than it was a year ago, much better than the market decline of around 12% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! Delivery Hero hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for Delivery Hero

Delivery Hero isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last twelve months, Delivery Hero's revenue grew by 86%. That's a head and shoulders above most loss-making companies. The solid 82% share price gain goes down pretty well, but it's not necessarily as good as you might expect given the top notch revenue growth. So quite frankly it could be a good time to investigate Delivery Hero in some detail. Since we evolved from monkeys, we think in linear terms by nature. So if growth goes exponential, opportunity may exist for the enlightened.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

XTRA:DHER Income Statement May 4th 2020
XTRA:DHER Income Statement May 4th 2020

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free report showing analyst forecasts should help you form a view on Delivery Hero

A Different Perspective

It's nice to see that Delivery Hero shareholders have gained 82% over the last year. That's better than the more recent three month gain of 7.7%, implying that share price has plateaued recently. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should be aware of the 3 warning signs we've spotted with Delivery Hero .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on DE exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record. Learn more about the team behind Simply Wall St.