Deliveroo plc (LON:ROO): Is Breakeven Near?

We feel now is a pretty good time to analyse Deliveroo plc's (LON:ROO) business as it appears the company may be on the cusp of a considerable accomplishment. Deliveroo plc operates an online food delivery platform. With the latest financial year loss of UK£243m and a trailing-twelve-month loss of UK£179m, the UK£2.0b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Deliveroo's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Deliveroo

Deliveroo is bordering on breakeven, according to the 13 British Hospitality analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of UK£46m in 2025. So, the company is predicted to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 60% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Deliveroo's growth isn’t the focus of this broad overview, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. Deliveroo currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Deliveroo, so if you are interested in understanding the company at a deeper level, take a look at Deliveroo's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Valuation: What is Deliveroo worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Deliveroo is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Deliveroo’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.