Deliveroo (LSE:ROO) - Share price, News & Analysis

Q: What is the Fair Price of ROO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

ROO (£0.95) is trading below our estimate of [[fair value]] (£3.32)

ROO fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	1/6
Past Performance	0/6
Financial Health	5/6
Dividends	0/6

ROO Stock Overview

Deliveroo plc operates an online food delivery platform.

Rewards

Trading at 71.5% below our estimate of its fair value

Revenue is forecast to grow 15.77% per year

Risk Analysis

Currently unprofitable and not forecast to become profitable over the next 3 years

Volatile share price over the past 3 months

Shareholders have been diluted in the past year

Deliveroo Competitors

Auction Technology Group

LSE:ATG

UK£1.1b

ASOS

LSE:ASC

UK£984.6m

THG

LSE:THG

UK£866.8m

boohoo group

AIM:BOO

UK£781.6m

Price History & Performance

Summary of all time highs, changes and price drops for Deliveroo
Historical stock prices
Current Share Price	UK£0.95
52 Week High	UK£3.97
52 Week Low	UK£0.78
Beta	0
1 Month Change	11.40%
3 Month Change	1.17%
1 Year Change	-75.45%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-67.02%

Recent News & Updates

Aug 10

We're Hopeful That Deliveroo (LON:ROO) Will Use Its Cash Wisely

There's no doubt that money can be made by owning shares of unprofitable businesses. For example, although Amazon.com...

Shareholder Returns

	ROO	GB Online Retail	GB Market
7D	2.9%	-0.6%	0.4%
1Y	-75.4%	-76.6%	-9.0%

Return vs Industry: ROO exceeded the UK Online Retail industry which returned -76.6% over the past year.

Return vs Market: ROO underperformed the UK Market which returned -9% over the past year.

Price Volatility

Is ROO's price volatile compared to industry and market?
ROO volatility
ROO Average Weekly Movement	10.0%
Online Retail Industry Average Movement	10.0%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.8%
10% least volatile stocks in GB Market	2.7%

Stable Share Price: ROO is more volatile than 75% of UK stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: ROO's weekly volatility (10%) has been stable over the past year, but is still higher than 75% of UK stocks.

About the Company

Founded	Employees	CEO	Website
2021	3,108	Will Shu	https://corporate.deliveroo.co.uk

Deliveroo plc operates an online food delivery platform. The company connects local consumers, restaurants and grocers, and riders to fulfil a purchase. It operates approximately more than 800 locations across 11 markets, including Australia, Belgium, France, Hong Kong, Italy, Ireland, the Netherlands, Singapore, the United Arab Emirates, Kuwait, and the United Kingdom.

Deliveroo Fundamentals Summary

How do Deliveroo's earnings and revenue compare to its market cap?
ROO fundamental statistics
Market Cap	UK£1.76b
Earnings (TTM)	-UK£357.90m
Revenue (TTM)	UK£1.93b

0.9x

P/S Ratio

-4.9x

P/E Ratio

Is ROO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ROO income statement (TTM)
Revenue	UK£1.93b
Cost of Revenue	UK£1.39b
Gross Profit	UK£537.80m
Other Expenses	UK£895.70m
Earnings	-UK£357.90m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	-0.19
Gross Margin	27.86%
Net Profit Margin	-18.54%
Debt/Equity Ratio	0%

How did ROO perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is ROO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ROO?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for ROO. This is calculated by dividing ROO's market cap by their current preferred multiple.
What is ROO's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£1.76b

ROO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.4x
Enterprise Value/EBITDA	-2x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does ROO's PS Ratio compare to its peers?

ROO PS Ratio vs Peers

The above table shows the PS ratio for ROO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	3.3x
ATG Auction Technology Group	12.2x	17.6%	UK£1.1b
ASC ASOS	0.2x	10.7%	UK£984.6m
THG THG	0.4x	15.2%	UK£866.8m
BOO boohoo group	0.4x	9.1%	UK£781.6m
ROO Deliveroo	0.9x	15.8%	UK£1.8b

Price-To-Sales vs Peers: ROO is good value based on its Price-To-Sales Ratio (0.9x) compared to the peer average (3.3x).

Price to Earnings Ratio vs Industry

How does ROO's PE Ratio compare vs other companies in the GB Online Retail Industry?

Price-To-Sales vs Industry: ROO is expensive based on its Price-To-Sales Ratio (0.9x) compared to the UK Online Retail industry average (0.4x)

Price to Sales Ratio vs Fair Ratio

What is ROO's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ROO PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	0.9x
Fair PS Ratio	1x

Price-To-Sales vs Fair Ratio: ROO is good value based on its Price-To-Sales Ratio (0.9x) compared to the estimated Fair Price-To-Sales Ratio (1x).

Share Price vs Fair Value

What is the Fair Price of ROO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ROO (£0.95) is trading below our estimate of fair value (£3.32)

Significantly Below Fair Value: ROO is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Deliveroo forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

51.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ROO is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: ROO is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: ROO is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: ROO's revenue (15.8% per year) is forecast to grow faster than the UK market (4.4% per year).

High Growth Revenue: ROO's revenue (15.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ROO is forecast to be unprofitable in 3 years.

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Past Performance

How has Deliveroo performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-8.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ROO is currently unprofitable.

Growing Profit Margin: ROO is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: ROO is unprofitable, and losses have increased over the past 5 years at a rate of 8.5% per year.

Accelerating Growth: Unable to compare ROO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ROO is unprofitable, making it difficult to compare its past year earnings growth to the Online Retail industry (-14.5%).

Return on Equity

High ROE: ROO has a negative Return on Equity (-37.07%), as it is currently unprofitable.

Discover strong past performing companies

Financial Health

How is Deliveroo's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: ROO's short term assets (£1.3B) exceed its short term liabilities (£333.3M).

Long Term Liabilities: ROO's short term assets (£1.3B) exceed its long term liabilities (£164.6M).

Debt to Equity History and Analysis

Debt Level: ROO is debt free.

Reducing Debt: ROO has not had any debt for past 5 years.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: ROO has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if ROO has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.

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Dividend

What is Deliveroo current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate ROO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ROO's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ROO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ROO's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as ROO has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure

CEO

Will Shu (43 yo)

no data

Tenure

UK£106,181,500

Compensation

Mr. William Shu, also known as Will, is the Founder of Deliveroo Holdings Plc (Formerly known as Roofoods Limited) and serves as its Chief Executive Officer. He was a Vice President of ESO Capital Group....

CEO Compensation Analysis

Compensation vs Market: Will's total compensation ($USD128.72M) is above average for companies of similar size in the UK market ($USD1.98M).

Compensation vs Earnings: Will's compensation has increased whilst the company is unprofitable.

Leadership Team

Experienced Management: ROO's management team is considered experienced (2.1 years average tenure).

Board Members

Experienced Board: ROO's board of directors are not considered experienced ( 1.4 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.5%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/14 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31