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Ocado Group plc (GB:OCDO)
LSE:OCDO
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Ocado Group (OCDO) AI Stock Analysis

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Ocado Group

(LSE:OCDO)

Rating:58Neutral
Price Target:
323.00p
▲(2.41%Upside)
Ocado Group's stock score reflects a mix of significant financial challenges and operational inefficiencies, offset by positive market momentum and strategic initiatives. While financial performance is the most significant concern due to high leverage and negative cash flow, technical indicators suggest bullish momentum. Corporate events and earnings call insights highlight strategic growth and strong liquidity, but valuation remains a concern with negative earnings.
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
Deployment and Guidance
The shares are expected to react negatively due to a weak FY25 module run-rate guidance.
Expansion Plans
The delay in Kroger's go-live of CFCs to FY26 affects Ocado's anticipated timeline for expansion.
Stock Sentiment
The sell-off in Ocado's shares reflects weakened sentiment around Kroger already.

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

Ocado Group Business Overview & Revenue Model

Company DescriptionOcado Group plc operates as an online grocery retailer in the United Kingdom and internationally. The company operates through three segments: Ocado Retail, UK Solutions & Logistics, and International Solutions. It also sells general merchandise products on its Ocado.com; provides online retail solutions; and offers customer fulfillment centre and logistics services. The company was founded in 2000 and is headquartered in Hatfield, the United Kingdom.
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:Jul 17, 2025
(Q2-2025)
|
% Change Since: 33.93%|
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted solid revenue growth, significant cash flow improvements, and strong liquidity, indicating positive business health. However, challenges such as increased finance costs, elevated support costs due to ongoing migrations, and the impact of wage increases affecting service delivery costs were noted. The deconsolidation of Ocado Retail also presented a financial setback.
Q2-2025 Updates
Positive Updates
Revenue Growth
Revenue increased by 13% overall, with Technology Solutions and Logistics growing at 15% and 12% respectively.
Cash Flow Improvement
Underlying cash flow improved by GBP 93 million year-over-year, driven by lower CapEx, fees from partners, and cost control.
Strong Liquidity Position
As of the end of June, liquidity was nearly GBP 1.2 billion, including GBP 866 million in cash and an undrawn GBP 300 million revolving credit facility.
Technology Solutions Performance
Technology Solutions reported GBP 73 million EBITDA, with a mid-20% EBITDA margin, driven by increased live modules and recurring revenue growth.
Ocado Retail Revenue Growth
Ocado Retail showed a 16% increase in revenue, with strong growth in customer numbers and order frequency.
Ocado Retail Customer Growth
Active customers increased by 13%, and Ocado Retail continues to invest in price to attract more customers.
Negative Updates
Ocado Retail Deconsolidation
Ocado Retail was deconsolidated, resulting in a GBP 9 million loss in share of results and JVs and associates.
Increased Finance Costs
Finance costs increased considerably due to higher coupons on debt raised over the past 12-18 months.
Service Delivery Cost Increase
Ocado Retail experienced a 24% increase in service delivery costs due to the impact of the national living wage and minimum wage hikes.
Elevated Support Costs
Ocado Retail carried dual costs due to migration to OSP, which will remain elevated until 2026/2027.
Company Guidance
During the call, the guidance for Ocado Group emphasized several key metrics and strategic priorities. The company aims to become cash flow positive by fiscal year 2026 through disciplined execution and lean operations. Revenue growth was reported at 13% overall, with Technology Solutions and Logistics segments growing by 15% and 12%, respectively. Underlying cash flow improved by GBP 93 million, while group adjusted EBITDA increased by GBP 40 million to GBP 92 million. Technology Solutions reported a GBP 73 million EBITDA with a mid-20% margin. Liquidity was strong at GBP 1.2 billion, which includes a GBP 300 million revolving credit facility. Ocado Logistics showed a consistent EBITDA contribution of GBP 19 million, with improvements in productivity metrics such as units per hour. The deconsolidation of Ocado Retail led to a GBP 783 million gain, reflecting a cautious valuation of the company's 50% stake. The company plans to focus on evolving its commercial strategy while addressing changes in exclusivity terms, aiming for more flexibility in partnerships. These efforts are underpinned by a focus on cost discipline and strategic growth in their international operations.

Ocado Group Financial Statement Overview

Summary
Ocado Group is facing significant financial challenges, including declining revenues and persistent losses. The company has high leverage and negative free cash flow, despite some improvement in operating cash flow. This indicates ongoing financial strain and the necessity for operational improvements.
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
Positive
Last Price315.40
Price Trends
50DMA
253.24
Positive
100DMA
262.41
Positive
200DMA
294.15
Positive
Market Momentum
MACD
9.39
Negative
RSI
77.99
Negative
STOCH
97.96
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:OCDO, the sentiment is Positive. The current price of 315.4 is above the 20-day moving average (MA) of 245.84, above the 50-day MA of 253.24, and above the 200-day MA of 294.15, indicating a bullish trend. The MACD of 9.39 indicates Negative momentum. The RSI at 77.99 is Negative, neither overbought nor oversold. The STOCH value of 97.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:OCDO.

Ocado Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GBCCH
78
Outperform
£14.57B21.0226.05%0.05%2.77%26.43%
77
Outperform
£6.54B19.406.21%456.99%0.34%153.91%
GBABF
75
Outperform
£15.57B12.3111.89%286.23%-0.38%14.68%
73
Outperform
£27.16B17.2510.18%322.73%
68
Neutral
¥194.46B21.428.29%2.36%4.93%0.78%
67
Neutral
£2.32B37.013.39%375.71%5.40%-67.46%
58
Neutral
$2.57B-14.70%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:OCDO
Ocado Group
328.20
-102.60
-23.82%
GB:ABF
Associated British Foods
2,201.00
-161.44
-6.83%
GB:CCH
Coca Cola HBC
4,034.00
1,309.37
48.06%
GB:SBRY
J Sainsbury plc
297.60
38.34
14.79%
GB:TATE
Tate & Lyle
527.00
-88.42
-14.37%
GB:TSCO
Tesco plc
426.10
112.27
35.77%

Ocado Group Corporate Events

Business Operations and Strategy
Ocado Group Directors Participate in Share Incentive Plan
Positive
Jul 17, 2025

Ocado Group plc announced the participation of its directors and senior management in the company’s Share Incentive Plan (SIP), which allows employees to purchase shares at market value and receive matching shares. This move, involving key figures like the CEO and CFO, underscores Ocado’s commitment to aligning the interests of its leadership with those of its shareholders, potentially impacting the company’s market perception positively.

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.

Financial DisclosuresRegulatory Filings and Compliance
Ocado Group Releases Interim Results for First Half of 2025
Neutral
Jul 17, 2025

Ocado Group plc has released its interim results for the 26 weeks ended 1 June 2025. The results are accessible on their corporate website and have been submitted to the Financial Conduct Authority’s National Storage Mechanism. This release is part of Ocado’s ongoing commitment to transparency and regulatory compliance, potentially impacting investor confidence and stakeholder engagement.

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 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.

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: Jul 19, 2025