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)

Market Cap

$2.86B

Dividend YieldN/A

Average Volume (3M)93.00

Price to Earnings (P/E)―

Beta (1Y)1.18

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees20,261

SectorConsumer Defensive

Sector Strength63

IndustryGrocery Stores

Share Statistics

EPS (TTM)-0.42

Shares Outstanding835,621,600

10 Day Avg. Volume219

30 Day Avg. Volume93

Financial Highlights & Ratios

PEG Ratio-0.29

Price to Book (P/B)1.65

Price to Sales (P/S)0.00

P/FCF Ratio-11.59

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$4.13

Price Target Upside22.19% Upside

Rating ConsensusHold

Number of Analyst Covering6

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

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

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

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
3.00B	1.21B	2.83B	2.51B	2.50B	2.33B
	Gross Profit
-315.90M	1.21B	69.30M	629.20M	707.40M	636.50M
	EBIT
-315.30M	-336.60M	-333.20M	-508.50M	-266.30M	-172.70M
	EBITDA
166.50M	219.40M	76.80M	-74.70M	124.10M	167.70M
	Net Income Common Stockholders
-216.60M	-336.20M	-314.00M	-455.50M	-223.20M	-134.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
753.40M	743.40M	884.80M	1.33B	1.47B	2.11B
	Total Assets
2.29B	4.16B	4.43B	4.81B	4.38B	4.00B
	Total Debt
608.20M	1.70B	1.96B	1.91B	1.83B	1.41B
	Net Debt
-142.40M	967.90M	1.08B	577.10M	359.80M	-301.60M
	Total Liabilities
1.23B	2.99B	2.92B	2.88B	2.67B	2.17B
	Stockholders Equity
1.05B	1.19B	1.49B	1.84B	1.59B	1.76B
Cash Flow		Free Cash Flow
-171.80M	-130.50M	-454.20M	-760.40M	-698.00M	-214.00M
	Operating Cash Flow
196.30M	268.90M	82.20M	25.50M	-7.30M	237.80M
	Investing Cash Flow
-452.10M	-353.70M	-500.10M	-735.00M	-532.70M	-695.70M
	Financing Cash Flow
-10.90M	-24.30M	-10.10M	547.10M	282.50M	1.53B

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
OCDGF		$2.86B	―	-14.70%	―	―	―
SBRY	79 Outperform	£6.35B	18.66	6.21%	4.70%	0.34%	153.91%
TSCO	78 Outperform	£25.74B	16.19	10.18%	3.51%	―	―
ABF	77 Outperform	£14.73B	11.60	11.89%	3.06%	-0.38%	14.68%
CCH	76 Outperform	£14.16B	20.43	26.05%	2.23%	2.77%	26.43%
TATE	76 Outperform	£2.45B	39.24	3.39%	3.47%	-11.03%	-2.05%
Sector *	65 Neutral	$8.89B	15.01	4.75%	203.76%	3.54%	-2.49%

* Consumer Defensive Sector Average

Performance Comparison

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.