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Ocado Group plc (GB:OCDO)
LSE:OCDO

Ocado Group (OCDO) AI Stock Analysis

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GB

Ocado Group

(LSE:OCDO)

Rating:51Neutral
Price Target:
246.00p
▲(2.37%Upside)
The overall stock score reflects significant financial challenges and weak technical indicators. However, positive developments from the earnings call and corporate events provide some optimism for future growth and improved financial health. Financial performance remains the most significant factor, highlighting the need for operational and financial improvements.
Positive Factors
Cash Flow
Ocado's free cash flow is guided to be better than previous estimates due to lower capex.
Financial Efficiency
Ocado is guiding for a substantial reduction in technology costs from FY24, implying improved financial efficiency.
Negative Factors
Growth Expectations
Kroger's earnings call suggests no imminent commitment to new CFCs, impacting Ocado's growth expectations.
Timeline for Expansion
The delay in Kroger's go-live of CFCs to FY26 affects Ocado's anticipated timeline for expansion.

Ocado Group (OCDO) vs. iShares MSCI United Kingdom ETF (EWC)

Ocado Group Business Overview & Revenue Model

Company DescriptionOcado Group (OCDO) is a UK-based company primarily engaged in the online grocery retail and technology sector. It operates through two main segments: Retail and Solutions. The Retail segment is represented by Ocado.com, the company's online grocery platform, which offers a wide range of food and non-food products. The Solutions segment involves providing end-to-end e-commerce solutions and technology to major global grocery retailers, leveraging the company's proprietary Ocado Smart Platform (OSP). This includes automated fulfilment, delivery, and customer interface systems.
How the Company Makes MoneyOcado Group generates revenue through two primary channels: its online grocery retail operations and its technology solutions for third-party retailers. In the Retail segment, the company makes money by selling groceries and related items directly to consumers through its online platform, Ocado.com. This involves a combination of product sales and delivery fees. The Solutions segment is a significant revenue stream, where Ocado licenses its Ocado Smart Platform (OSP) technology to other grocery retailers worldwide. This includes upfront fees for technology implementation, recurring fees based on sales or usage, and additional charges for ongoing support and enhancements. Key partnerships with major retailers, such as Kroger in the United States and Groupe Casino in France, are crucial contributors to this revenue stream, as they leverage Ocado's technology to enhance their own operations.

Ocado Group Earnings Call Summary

Earnings Call Date:Feb 27, 2025
(Q4-2024)
|
% Change Since: -27.88%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Positive
The earnings call highlighted substantial revenue growth, improved operational efficiency, and increased customer satisfaction, with some challenges related to capacity and a minor technical issue during a peak period. The strategic focus on enhancing customer value and operational efficiency positions the company well for future growth.
Q4-2024 Updates
Positive Updates
Significant Retail Revenue Growth
Retail revenue grew by 17.5% to GBP 716 million in Q4 and by 13.9% to GBP 2.668 billion for the full fiscal year 2024.
Increase in Average Orders and Active Customer Base
Average orders per week grew by 16.9% to 476,000 in Q4, with an active customer base increase of 12.1% to 1.1 million.
Operational Efficiency Improvements
CFC efficiency improved with average units per hour rising to 220, up 15% year-on-year, and the Luton CFC reaching 269 UPH.
Customer Satisfaction and NPS Growth
NPS score increased by 4.9 percentage points, marking the highest NPS in the industry.
Strategic Focus on Customer Proposition and Smart Growth
Ocado plans to continue focusing on unbeatable choice, unrivaled service, and good value while increasing customer lifetime value and operational efficiency.
Negative Updates
Technical Issue During Christmas Period
A technical issue affected a CFC during the Christmas period, impacting a small proportion of orders despite overall high performance.
Capacity Challenges
Despite exceeding design capacity during Christmas, there are ongoing discussions about potential capacity expansion at Erith and no plans to reopen Hatfield.
Company Guidance
During the Ocado Q4 2024 Analyst Call, CEO Hannah Gibson highlighted several key performance metrics and strategic initiatives that drove the company's successful year. Retail revenue for the quarter grew by 17.5% to GBP 716 million, with volumes on ocado.com increasing by 17% year-on-year and average orders per week rising by 16.9% to 476,000. For the full fiscal year, retail revenue increased by 13.9% to GBP 2.668 billion, while the active customer base expanded by 12.1% to 1.1 million customers. The average basket value also saw a modest rise of 1% to GBP 122.09. Operational efficiency improved, with average units per hour (UPH) at their CFCs increasing by 15% to 220, and the newest CFC in Luton achieving 269 UPH. Ocado's focus on enhancing customer service and value perceptions led to their Net Promoter Score (NPS) increasing by 4.9 percentage points. Looking forward to FY 2025, Ocado anticipates continued sales volume growth, aiming for mid-high single-digit adjusted EBITDA margins in the midterm, with further advancements in operational efficiency and capacity utilization.

Ocado Group Financial Statement Overview

Summary
Ocado Group faces financial challenges with declining revenue and persistent losses. The high leverage and negative free cash flow indicate financial strain, despite improvements in operating cash flow.
Income Statement
45
Neutral
Ocado Group has seen a decline in total revenue from the previous year, with the 2024 revenue dropping significantly by over 50%. The gross profit margin is unusually high due to total revenue and gross profit being equal, suggesting potential data issues. The company continues to face challenges with profitability, as indicated by negative EBIT and net income margins. This reflects ongoing operational inefficiencies and cost challenges.
Balance Sheet
55
Neutral
The balance sheet shows a high debt-to-equity ratio, indicating significant leverage, which poses long-term financial risks. Stockholders' equity has decreased over recent years, reflecting financial strain. However, the equity ratio indicates that equity financing still supports a substantial portion of total assets, providing some stability.
Cash Flow
50
Neutral
Operating cash flow has improved significantly, indicating better cash management. However, free cash flow remains negative, suggesting high capital expenditures and ongoing challenges in generating positive cash flow. The operating cash flow to net income ratio is strong, which is a positive indicator of cash generation compared to earnings.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.21B2.83B2.51B2.50B2.33B
Gross Profit106.60M69.30M629.20M707.40M636.50M
EBITDA127.90M76.80M-74.70M124.10M167.70M
Net Income-336.20M-314.00M-455.50M-223.20M-134.30M
Balance Sheet
Total Assets4.16B4.43B4.81B4.38B4.00B
Cash, Cash Equivalents and Short-Term Investments743.40M884.80M1.33B1.47B2.11B
Total Debt1.70B1.96B1.91B1.83B1.41B
Total Liabilities2.99B2.92B2.88B2.67B2.17B
Stockholders Equity1.19B1.49B1.84B1.59B1.76B
Cash Flow
Free Cash Flow-130.50M-454.20M-760.40M-698.00M-214.00M
Operating Cash Flow268.90M82.20M25.50M-7.30M237.80M
Investing Cash Flow-353.70M-500.10M-735.00M-532.70M-695.70M
Financing Cash Flow-24.30M-10.10M547.10M282.50M1.53B

Ocado Group Technical Analysis

Technical Analysis Sentiment
Negative
Last Price240.30
Price Trends
50DMA
260.46
Negative
100DMA
271.48
Negative
200DMA
302.03
Negative
Market Momentum
MACD
-8.67
Positive
RSI
45.29
Neutral
STOCH
38.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:OCDO, the sentiment is Negative. The current price of 240.3 is below the 20-day moving average (MA) of 244.81, below the 50-day MA of 260.46, and below the 200-day MA of 302.03, indicating a bearish trend. The MACD of -8.67 indicates Positive momentum. The RSI at 45.29 is Neutral, neither overbought nor oversold. The STOCH value of 38.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:OCDO.

Ocado Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
£2.33B37.233.39%3.86%-11.03%-2.05%
GBCCH
75
Outperform
£14.07B20.3026.05%1.70%2.77%26.43%
GBABF
75
Outperform
£14.98B11.8311.89%1.50%-0.38%14.68%
75
Outperform
£6.51B19.206.21%6.69%0.34%153.91%
73
Outperform
£26.25B16.6110.18%3.45%
53
Neutral
C$4.46B3.71-22.83%4.40%8.13%2.00%
51
Neutral
$1.89B-14.70%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:OCDO
Ocado Group
240.30
-60.30
-20.06%
GB:TATE
Tate & Lyle
521.00
-61.06
-10.49%
GB:CCH
Coca Cola HBC
3,814.00
1,191.08
45.41%
GB:TSCO
Tesco plc
406.00
113.07
38.60%
GB:SBRY
J Sainsbury plc
286.60
44.63
18.44%
GB:ABF
Associated British Foods
2,097.00
-279.83
-11.77%

Ocado Group Corporate Events

Regulatory Filings and Compliance
Ocado Group Announces Total Voting Rights for June 2025
Neutral
Jul 1, 2025

Ocado Group plc announced its total voting rights as of June 30, 2025, with 836,505,123 issued ordinary shares, each carrying one vote. The announcement impacts stakeholders by clarifying the number of shares and voting rights, which is essential for compliance with the FCA’s Disclosure Guidance and Transparency Rules.

The most recent analyst rating on (GB:OCDO) stock is a Hold with a £340.00 price target. To see the full list of analyst forecasts on Ocado Group stock, see the GB:OCDO Stock Forecast page.

Business Operations and Strategy
Ocado and Bon Preu Expand Partnership with New Catalonia Fulfilment Centre
Positive
Jun 18, 2025

Ocado Group and Bon Preu Group have announced the construction of a new Customer Fulfilment Centre in Catalonia, expanding their partnership to enhance Bon Preu’s online grocery services. This new automated facility will leverage Ocado’s advanced technologies to improve order efficiency, freshness, and cost-effectiveness, further solidifying Bon Preu’s leading position in the Catalan online grocery market and potentially increasing its market share.

The most recent analyst rating on (GB:OCDO) stock is a Buy with a £400.00 price target. To see the full list of analyst forecasts on Ocado Group stock, see the GB:OCDO Stock Forecast page.

Business Operations and Strategy
Ocado Group Announces Director Participation in Share Incentive Plan
Neutral
Jun 17, 2025

Ocado Group plc announced the participation of its directors and senior management in the Ocado Share Incentive Plan (SIP), a tax-advantaged all-employee share scheme. This initiative allows employees to purchase ordinary shares at market value and receive matching shares, aligning the interests of management with shareholders and potentially enhancing employee engagement and retention.

The most recent analyst rating on (GB:OCDO) stock is a Buy with a £400.00 price target. To see the full list of analyst forecasts on Ocado Group stock, see the GB:OCDO Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Ocado Draws Down $152M Letter of Credit from Kroger Partnership
Positive
Jun 13, 2025

Ocado Group Plc has drawn down on a US$152 million Letter of Credit from the Bank of Nova Scotia, which was part of a 2018 partnership arrangement with The Kroger Co. This financial move marks the maturity of the agreement, providing Ocado with capital to support its investment in Kroger’s online business. This development could bolster Ocado’s financial position and further its strategic goals in the online grocery sector.

The most recent analyst rating on (GB:OCDO) stock is a Buy with a £400.00 price target. To see the full list of analyst forecasts on Ocado Group stock, see the GB:OCDO Stock Forecast page.

Executive/Board ChangesRegulatory Filings and Compliance
Ocado Group’s Deputy CEO Share Vesting and Disposal
Neutral
Jun 4, 2025

Ocado Group announced that an award granted to James Matthews, Deputy CEO, partially vested under the Ocado Restricted Share Plan, resulting in an automatic disposal of shares to cover tax liabilities. This transaction, conducted on the London Stock Exchange, reflects the company’s adherence to regulatory requirements and transparency in executive share dealings.

The most recent analyst rating on (GB:OCDO) stock is a Buy with a £400.00 price target. To see the full list of analyst forecasts on Ocado Group stock, see the GB:OCDO Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Ocado Group Announces Bond Repurchase and New Note Issuance
Neutral
Jun 4, 2025

Ocado Group has announced a financial maneuver involving the repurchase of £80 million of its senior unsecured convertible bonds and the issuance of £100 million in high-yield notes. This strategy aims to extend the company’s debt maturity profile and reduce leverage over time, potentially impacting its financial stability and market positioning.

The most recent analyst rating on (GB:OCDO) stock is a Buy with a £400.00 price target. To see the full list of analyst forecasts on Ocado Group stock, see the GB:OCDO Stock Forecast page.

Executive/Board Changes
Ocado Group Announces Leadership Transition with New Company Secretary
Neutral
Jun 3, 2025

Ocado Group plc announced the retirement of Neill Abrams, a founding team member who significantly contributed to the company’s growth, from his role as Group General Counsel and Company Secretary. Mollie Stoker, with prior experience at Ocado and Britvic, will take over the position, ensuring a smooth transition and continuity in leadership.

The most recent analyst rating on (GB:OCDO) stock is a Buy with a £400.00 price target. To see the full list of analyst forecasts on Ocado Group stock, see the GB:OCDO Stock Forecast page.

Regulatory Filings and Compliance
Ocado Group Announces Total Voting Rights Update
Neutral
Jun 2, 2025

Ocado Group plc announced its total voting rights as of May 30, 2025, with 835,621,588 issued ordinary shares, each carrying one vote. The announcement clarifies the voting rights structure, including shares held by trustees for employee plans, and provides a denominator for shareholders to calculate their interests under FCA rules.

The most recent analyst rating on (GB:OCDO) stock is a Buy with a £400.00 price target. To see the full list of analyst forecasts on Ocado Group stock, see the GB:OCDO Stock Forecast page.

Business Operations and Strategy
Ocado Group Executives Participate in Share Incentive Plan
Positive
May 20, 2025

Ocado Group plc has announced the participation of its key executives in the Ocado Share Incentive Plan, a tax-advantaged scheme allowing employees to purchase company shares at market value. This initiative underscores Ocado’s commitment to aligning employee interests with company performance, potentially strengthening stakeholder confidence and enhancing its market position.

The most recent analyst rating on (GB:OCDO) stock is a Buy with a £400.00 price target. To see the full list of analyst forecasts on Ocado Group stock, see the GB:OCDO Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Ocado Group Announces Results of Note Tender Offers
Neutral
May 7, 2025

Ocado Group plc announced the results of its invitation to holders of its Convertible Bonds and 2026 Notes to tender these for purchase in cash. A total of £206,029,000 in principal amount of Notes were tendered, with a purchase consideration of £202,733,601.25. This move is part of Ocado’s strategy to manage its debt obligations and optimize its financial structure, potentially impacting its market positioning and stakeholder interests.

Private Placements and FinancingBusiness Operations and Strategy
Ocado Group Sets £300 Million Cap for Note Tender Offers
Neutral
May 1, 2025

Ocado Group has announced a maximum spend amount of £300 million for its tender offers to purchase certain outstanding notes. This financial maneuver, involving Convertible Bonds and 2026 Notes, is part of Ocado’s strategic financial management, potentially impacting its liquidity and market positioning. The company retains the discretion to adjust the spend amount and will disclose the results post-expiration of the offer on May 6, 2025.

Private Placements and FinancingBusiness Operations and Strategy
Ocado Group Successfully Prices £300 Million Senior Notes
Positive
May 1, 2025

Ocado Group plc has successfully priced an offering of £300 million in senior unsecured notes due 2030, with a coupon of 11%. The proceeds will be used to purchase a portion of Ocado’s outstanding bonds due in 2025 and 2026, aiming to extend the maturity profile of its debt and reduce leverage over time. This move is expected to strengthen Ocado’s financial position and support its long-term strategic goals.

Regulatory Filings and Compliance
Ocado Group Announces Total Voting Rights Update
Neutral
May 1, 2025

Ocado Group plc announced its total voting rights as of April 30, 2025, with 835,406,419 issued ordinary shares, each carrying one vote at general meetings. The announcement details the distribution of shares held by various trustees and the implications for shareholder notifications under FCA rules, highlighting that 10,511,575 shares are treated as treasury shares and excluded from earnings per share calculations.

Shareholder MeetingsBusiness Operations and Strategy
Ocado Group’s AGM 2025: All Resolutions Passed with Strong Shareholder Support
Positive
Apr 29, 2025

Ocado Group held its Annual General Meeting on April 29, 2025, where all proposed resolutions were passed, including the election and re-election of directors, the reappointment of auditors, and the authorization of political donations. The approval of these resolutions reflects strong shareholder support for the company’s strategic direction and governance, potentially enhancing its operational stability and investor confidence.

Private Placements and FinancingBusiness Operations and Strategy
Ocado Group Launches Tender Offer to Manage Debt Maturity
Positive
Apr 29, 2025

Ocado Group plc has initiated a tender offer inviting holders of its Convertible Bonds due 2025 and 2026 Notes to sell these for cash. This move is part of Ocado’s strategy to manage its debt maturity profile and is linked to a new offering of senior unsecured notes due 2030. The proceeds from this new offering will be used to repurchase the tendered notes, with any remaining funds aimed at reducing the company’s leverage over time. This strategic financial maneuver could potentially strengthen Ocado’s market position by optimizing its debt structure.

Private Placements and Financing
Ocado Group Announces £300 Million Bond Offering to Refinance Debt
Neutral
Apr 29, 2025

Ocado Group plc announced a proposed bond offering of £300 million in senior unsecured notes due 2030, aimed at refinancing existing debt and extending its maturity profile. The proceeds will be used to purchase a portion of Ocado’s outstanding bonds due in 2025 and 2026, with any excess funds intended to reduce leverage over time, potentially impacting the company’s financial stability and market position.

Business Operations and Strategy
Ocado Group Executives Participate in Share Incentive Plan
Positive
Apr 17, 2025

Ocado Group plc announced the participation of its key executives, including the CEO and CFO, in the Ocado Share Incentive Plan (SIP), which allows employees to purchase company shares at market value and receive additional matching shares. This move reflects the company’s commitment to aligning the interests of its management with shareholders and could strengthen its market position by incentivizing leadership to drive long-term growth.

Business Operations and Strategy
Ocado Group’s Major Holdings Adjusted by Lingotto Investment
Neutral
Apr 7, 2025

Ocado Group PLC has announced a change in its major holdings, with Lingotto Investment Management LLP adjusting its financial instruments, resulting in a new total of 13.09% voting rights. This change reflects a strategic shift in investment, potentially impacting Ocado’s market positioning and stakeholder interests.

Executive/Board ChangesBusiness Operations and Strategy
Ocado Group Announces Sharesave Scheme Options for Executives
Positive
Apr 2, 2025

Ocado Group has announced the grant of options under its Sharesave Scheme to key executives, including the CEO and CFO. This scheme allows employees to purchase shares through accumulated savings over three years, reflecting Ocado’s commitment to employee investment and alignment with company growth. The grant of options signifies Ocado’s strategic focus on enhancing employee engagement and retaining top talent, which may positively impact its operational efficiency and market positioning.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 18, 2025