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Olo (OLO)
NYSE:OLO
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Olo
(NYSE:OLO)
Rating:74Outperform
Price Target:
$10.50
▲( 20.00% Upside)
Positive Factors
Customer Satisfaction
Customers continue to be very happy with Olo’s product, capabilities, and customer support/success as evidenced by gross retention that has remained around 98%.
Earnings
Olo reported solid fourth-quarter results, and guidance for 2025 was better than expected, particularly on profit.
Partnerships
Olo announced a new partnership with FreedomPay, which should accelerate Olo Pay's integration with a wide range of payment systems.
Negative Factors
Product Gaps
Olo still has some notable gaps in its solutions, especially in facilitating in-person commerce.
Revenue Mix
The company expects gross margin to decline year over year as Olo Pay becomes a larger part of the total revenue mix.
Olo (OLO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.46B
Dividend YieldN/A
Average Volume (3M)1.72M
Price to Earnings (P/E)500.0
Beta (1Y)1.09
Revenue Growth23.31%
EPS GrowthN/A
CountryUS
Employees617
SectorTechnology
Sector Strength78
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.07
Shares Outstanding117,844,666
10 Day Avg. Volume1,920,755
30 Day Avg. Volume1,722,778
Financial Highlights & Ratios
PEG Ratio-16.77
Price to Book (P/B)2.08
Price to Sales (P/S)0.00
P/FCF Ratio53.50
Enterprise Value/Market Cap0.80
Enterprise Value/Revenue1.11
Enterprise Value/Gross Profit7.49
Enterprise Value/Ebitda-35.13
Forecast
1Y Price Target
$9.40Price Target Upside7.43% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Olo Business Overview & Revenue Model
Company DescriptionOlo Inc. provides software-as-a-service platform for multi-location restaurants in the United States. The company's platform enables on-demand commerce operations, which cover digital ordering and delivery through online and mobile ordering modules. Its modules include Order Management, an on-demand digital commerce and channel management solutions that enables consumers to order directly from and pay restaurants via mobile, web, kiosk, voice, and other digital channels; and Delivery Enablement, a fulfillment network, as well as a network aggregator and channel management solution, which enables restaurants to offer, manage, and expand direct delivery, as well as allows restaurants to control and syndicate menu, pricing, location data, and availability, while directly integrating and optimizing orders from third-parties into the restaurants' point-of-sale and systems. The company also provides Customer Engagement solution, a suite of restaurant-centric marketing and sentiment solutions that enables restaurants to collect, analyze, and act on guest data; Front-of-House solution, which enables restaurants to streamline the queue orders from multiple sales channels; and Payment solution, a payment platform that offers fraud prevention that results in enhanced authorization rates for valid transactions. The company was formerly known as Mobo Systems, Inc. and changed its name to Olo Inc. in January 2020. Olo Inc. was incorporated in 2005 and is headquartered in New York, New York.
How the Company Makes MoneyOlo primarily makes money through subscription fees and transaction fees. Restaurants pay subscription fees to use Olo's software platform, which provides tools for online ordering, delivery management, and customer engagement. In addition to subscription revenue, Olo earns transaction fees each time a customer places an order through its platform. These transaction fees are typically a percentage of the order value. The company's revenue model is further supported by significant partnerships with restaurant chains and third-party delivery services, which expand its reach and drive more transactions through its platform.
Olo Key Performance Indicators (KPIs)
Any
Locations Served
Shows the number of locations utilizing the company's services, reflecting market penetration and potential for expansion.
Shows the number of locations utilizing the company's services, reflecting market penetration and potential for expansion.
Data provided by:
Main Street Data
Main Street DataOlo Financial Statement Overview
Summary
Olo shows impressive growth and financial stability with strong revenue and cash flow improvements. While profitability remains a challenge, the company's healthy balance sheet provides a solid foundation for continued expansion. Strategic focus on sustaining revenue growth and improving margins will be critical for future success.Income Statement
Olo has demonstrated strong revenue growth with a 24.8% increase from 2023 to 2024, building on consistent annual growth since 2019. The company improved its gross profit margin to 54.9% in 2024, indicating effective cost management. However, a continued negative EBIT and net profit margin reflect ongoing profitability challenges, typical for a growing software company.82
Very Positive
Balance Sheet
Olo's balance sheet shows a strong equity position with an equity ratio of 90.5% in 2024, indicating financial stability. The debt-to-equity ratio is low at 0.02, suggesting minimal leverage. Despite negative net income, the ROE is less relevant due to the company's growth phase. The strong cash position enhances financial resilience.77
Positive
Cash Flow
The cash flow statement is robust, with a significant turnaround in free cash flow from negative $19.67 million in 2023 to positive $38.81 million in 2024. The operating cash flow to net income ratio signals healthy operational efficiency, although the free cash flow to net income ratio is distorted by negative net income.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 284.94M | 228.29M | 185.40M | 149.37M | 98.42M | Gross Profit |
| 156.42M | 138.97M | 127.89M | 118.54M | 79.76M | EBIT |
| -19.14M | -75.08M | -51.66M | -27.98M | 16.09M | EBITDA |
| 14.61M | -47.56M | -41.05M | -45.21M | 4.08M | Net Income Common Stockholders |
| -897.00K | -58.29M | -45.97M | -42.27M | 3.06M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 360.74M | 362.55M | 448.77M | 514.45M | 75.76M | Total Assets |
| 754.78M | 742.82M | 775.56M | 755.88M | 134.42M | Total Debt |
| 13.98M | 18.86M | 20.05M | 0.00 | 0.00 | Net Debt |
| -272.77M | -259.36M | -330.03M | -514.45M | -75.76M | Total Liabilities |
| 71.55M | 91.35M | 77.95M | 54.13M | 186.91M | Stockholders Equity |
| 683.22M | 651.47M | 697.62M | 701.75M | -52.48M |
| Cash Flow | Free Cash Flow | |||
| 38.80M | -19.67M | -6.65M | 14.41M | 19.50M | Operating Cash Flow |
| 39.69M | -6.57M | 2.34M | 16.25M | 20.77M | Investing Cash Flow |
| -16.87M | -19.49M | -158.48M | -77.07M | -1.27M | Financing Cash Flow |
| -14.28M | -45.80M | -8.23M | 499.51M | 45.33M |
Olo Technical Analysis
Positive
8.75
Price Trends
6.97
Positive
7.07
Positive
6.43
Positive
Market Momentum
0.66
Positive
64.79
Neutral
27.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OLO, the sentiment is Positive. The current price of 8.75 is above the 20-day moving average (MA) of 8.17, above the 50-day MA of 6.97, and above the 200-day MA of 6.43, indicating a bullish trend. The MACD of 0.66 indicates Positive momentum. The RSI at 64.79 is Neutral, neither overbought nor oversold. The STOCH value of 27.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OLO.
Olo Risk Analysis
Olo disclosed 65 risk factors in its most recent earnings report. Olo reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Olo Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $1.63B | 32.41 | 30.85% | 2.04% | 10.07% | 31.38% | |
74 Outperform | $1.46B | 500.00 | 0.49% | ― | 23.31% | ― | |
71 Outperform | $1.13B | 74.84 | 6.26% | ― | 7.71% | ― | |
69 Neutral | $972.40M | 114.79 | 3.34% | ― | 28.92% | ― | |
63 Neutral | $1.24B | ― | -36.95% | ― | 17.79% | 16.49% | |
61 Neutral | $11.28B | 10.16 | -6.88% | 2.97% | 7.41% | -8.93% | |
55 Neutral | $899.66M | ― | -93.00% | ― | -0.40% | 63.36% |
* Technology Sector Average
Performance Comparison
OLO
Olo
8.75
4.11
88.58%
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21.32
-11.73
-35.49%
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MoneyLion
85.90
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-12.74%
KARO
Karooooo
52.86
24.82
88.52%
BLND
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3.48
0.46
15.23%
VTEX
VTEX
6.19
-0.62
-9.10%
Olo Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 8.70%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call presented a predominantly positive outlook with significant revenue growth, new customer wins, and strong financial performance. Despite challenges such as negative free cash flow and macroeconomic uncertainty, the company's strategic initiatives and market position appear strong.Q1-2025 Updates
Positive Updates
Record Revenue Growth
Total revenue for Q1 2025 was $80.7 million, an increase of 21% year-over-year. Platform revenue increased by 20% year-over-year.
Expansion in Active Locations and ARPU Growth
Olo ended Q1 with approximately 88,000 active locations, adding approximately 2,000 net new locations. ARPU grew by 12% year-over-year.
Successful Customer Wins and Deployments
Olo signed a Catering Plus pilot with Chipotle, a top 25 brand, and a full deployment deal with an existing publicly-traded enterprise customer for Olo Pay card presence.
Strong Financial Performance
Non-GAAP operating income was $11.5 million, a significant increase from $5.6 million a year ago. Operating margin was 14.3%, up approximately 580 basis points year-over-year.
Positive Market Position
Olo was named Texas Roadhouse's 2024 Vendor of the Year, indicating strong customer satisfaction and market position.
Negative Updates
Negative Free Cash Flow
Free cash flow was negative $1.9 million in Q1 2025, compared to $2.8 million a year ago, primarily due to changes in partner payment terms.
Impact of Macroeconomic Uncertainty
The company noted rising input costs and macroeconomic uncertainty as challenges, though it believes these factors may drive a trade-down effect beneficial to limited service restaurants.
Company Guidance
In the Olo Inc. First Quarter 2025 Earnings Conference Call, the company reported exceeding the high end of its revenue and non-GAAP operating income guidance ranges. Olo added approximately 2,000 new locations quarter-to-quarter, bringing the total to around 88,000 active locations and achieving a gross revenue retention rate above 98%. The company also saw a 12% year-over-year growth in ARPU, driven by increased order volumes and modules per location. Olo's revenue for the quarter was $80.7 million, a 21% increase year-over-year, with platform revenue at $79.2 million, up 20%. Gross profit for the first quarter was $49.2 million, reflecting an 18% increase, with a gross margin of 60.9%. Olo's net income was $11.8 million, or $0.07 per share, and they achieved a Rule of 40 performance of 42%. For the full year 2025, Olo expects revenue between $338.5 million and $340 million, with non-GAAP operating income ranging from $48.6 million to $49.8 million. The company continues to focus on expanding its Olo Pay card presence, scaling Catering Plus, and increasing the number of Olo flywheel brands while maintaining strong financial discipline.Olo Corporate Events
Executive/Board Changes
Olo Announces Departure of Chief Revenue Officer
Neutral
Jan 21, 2025
On November 1, 2024, Olo Inc. and its Chief Revenue Officer, Mr. Diego Panama, agreed on his departure from the company effective December 31, 2024. Mr. Panama will provide advisory services until March 31, 2025, for which he will receive monthly fees, a prorated bonus, and other benefits. His stock awards will continue to vest through this advisory period, and he will receive severance payments starting April 1, 2025.
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.