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Ocado Group plc (OCDGF)
OTHER OTC:OCDGF

Ocado Group (OCDGF) AI Stock Analysis

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Positive Factors
Financial Efficiency
Ocado is guiding for a substantial reduction in technology costs, implying improved financial efficiency.
Free Cash Flow
Ocado's free cash flow is guided to be better than previous estimates due to lower capital expenditures.
Negative Factors
Expansion Plans
The delay in Kroger's go-live of Customer Fulfillment Centers to FY26 affects Ocado's anticipated timeline for expansion.
Growth Expectations
Kroger's earnings call suggests no imminent commitment to new Customer Fulfillment Centers, impacting Ocado's growth expectations.
Stock Performance
The shares are expected to react negatively due to a weak FY25 module run-rate guidance.

Ocado Group (OCDGF) vs. SPDR S&P 500 ETF (SPY)

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 Money

Ocado Group Earnings Call Summary

Earnings Call Date:Feb 27, 2025
(Q4-2024)
|
% Change Since: -18.75%|
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 is facing significant financial challenges reflected in declining revenues and persistent losses. While there is some improvement in operating cash flow, high leverage and negative free cash flow pose ongoing risks. The company needs to address operational inefficiencies and reduce costs to improve profitability and financial stability.
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.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
3.00B1.21B2.83B2.51B2.50B2.33B
Gross Profit
-315.90M1.21B69.30M629.20M707.40M636.50M
EBIT
-315.30M-336.60M-333.20M-508.50M-266.30M-172.70M
EBITDA
166.50M219.40M76.80M-74.70M124.10M167.70M
Net Income Common Stockholders
-216.60M-336.20M-314.00M-455.50M-223.20M-134.30M
Balance SheetCash, Cash Equivalents and Short-Term Investments
753.40M743.40M884.80M1.33B1.47B2.11B
Total Assets
2.29B4.16B4.43B4.81B4.38B4.00B
Total Debt
608.20M1.70B1.96B1.91B1.83B1.41B
Net Debt
-142.40M967.90M1.08B577.10M359.80M-301.60M
Total Liabilities
1.23B2.99B2.92B2.88B2.67B2.17B
Stockholders Equity
1.05B1.19B1.49B1.84B1.59B1.76B
Cash FlowFree Cash Flow
-171.80M-130.50M-454.20M-760.40M-698.00M-214.00M
Operating Cash Flow
196.30M268.90M82.20M25.50M-7.30M237.80M
Investing Cash Flow
-452.10M-353.70M-500.10M-735.00M-532.70M-695.70M
Financing Cash Flow
-10.90M-24.30M-10.10M547.10M282.50M1.53B

Ocado Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
$2.86B-14.70%
79
Outperform
£6.35B18.666.21%4.70%0.34%153.91%
78
Outperform
£25.74B16.1910.18%3.51%
GBABF
77
Outperform
£14.73B11.6011.89%3.06%-0.38%14.68%
GBCCH
76
Outperform
£14.16B20.4326.05%2.23%2.77%26.43%
76
Outperform
£2.45B39.243.39%3.47%-11.03%-2.05%
65
Neutral
$8.89B15.014.75%203.76%3.54%-2.49%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OCDGF
Ocado Group
3.38
-1.04
-23.53%
GB:ABF
Associated British Foods
2,057.00
-384.06
-15.73%
GB:CCH
Coca Cola HBC
3,896.00
1,255.48
47.55%
GB:SBRY
J Sainsbury plc
278.60
28.46
11.38%
GB:TATE
Tate & Lyle
556.00
-106.68
-16.10%
GB:TSCO
Tesco plc
390.60
96.13
32.65%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.