– Deliveroo is a food delivery business that operates in the UK, Ireland, France, Italy, and a few additional markets.
– The company is cheap with 2/3 of the market cap being a cash and a clear line-of-sight to FCF generation.
– Consensus estimates are too low.
– ROO has sold off with the tech/growth meltdown notwithstanding solid financial performance through the end of COVID and the subsequent UK consumer crisis.
– Despite not being the country-level GMV leader, ROO is leading in the most attractive sub-markets and has carved out a niche as the premium brand which yields higher average order values and better profitability despite the lower scale.
– Trades at ~7.9x 2023 EBITDA, ~2.8x 2024 EBITDA and ~1.0x 2026 EBITDA (versus consensus at 2023 EBITDA breakeven).
– A 15x EBITDA on 2026 EBITDA would result in 500% upside from the current levels.
Exp. gain: +500%.
Full write-up (free guest account required):
Deliveroo (ROO.L), mcap=£1782m