William Blair analyst Stephen Sheldon has maintained their neutral stance on OLO stock, giving a Hold rating on July 29.
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Stephen Sheldon’s rating is based on several factors surrounding Olo’s recent financial performance and strategic developments. The company reported second-quarter results that exceeded expectations in terms of revenue and adjusted operating income, with revenue reaching $86 million, marking a 22% year-over-year growth. This was slightly above both the firm’s and consensus estimates. Additionally, Olo increased its net new locations by 1,000, ending the quarter with 89,000 locations.
Despite these positive results, there was a noticeable deceleration in adjusted gross profit growth, which was 10% compared to 18% in the previous quarter. Furthermore, the adjusted operating income margin was 15%, slightly surpassing estimates. However, the pending acquisition by Thoma Bravo introduces uncertainty, leading to a decision not to update the financial model at this time. These factors collectively contribute to the Hold rating, reflecting a cautious stance amid ongoing developments.
In another report released on July 29, Lake Street also maintained a Hold rating on the stock with a $10.25 price target.