Olo (OLO) AI Stock Analysis

• Market Cap: $1.06B
• Dividend Yield: N/A
• Average Volume (3M): 1.15M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.98
• Revenue Growth: 24.81%
• EPS Growth: 98.55%
• Country: US
• Employees: 617
• Sector: Technology
• Sector Strength: 64
• Industry: Software - Application
• EPS (TTM): >-0.01
• Shares Outstanding: 116,851,680
• 10 Day Avg. Volume: 966,970
• 30 Day Avg. Volume: 1,151,365
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 5.86
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $8.50
• Price Target Upside: 37.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

Olo's strong financial performance, characterized by robust revenue growth and improved cash flow, is a significant strength. The company's healthy balance sheet supports future growth prospects. However, technical indicators are mixed, and valuation metrics are challenged by a negative P/E ratio. While the recent earnings call was positive, expected margin compression due to the scaling of Olo Pay is a key risk to monitor.

Positive Factors

Acquisition Interest

Olo is exploring a potential sale after receiving interest from potential buyers.

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%.

Revenue and Profit Forecast

Management's guidance for 2025 was above expectations on revenue and more notably on profit.

Negative Factors

Growth Challenges

OLO's location growth trajectory will face challenges, especially as it looks to the 'emerging enterprise' space for new customers.

Margin Concerns

The company expects gross margin to decline year over year as Olo Pay becomes a larger part of the total revenue mix.

Solution Gaps

Olo still has some notable gaps in its solutions, especially in facilitating in-person commerce.

Olo Business Overview & Revenue Model

Company Description

Olo (OLO) is a leading provider of digital ordering and delivery solutions for the restaurant industry. The company offers a comprehensive platform that enables restaurants to manage their online and mobile ordering, delivery, and customer engagement. Olo's services are designed to streamline operations, enhance customer experiences, and drive sales growth for restaurant brands of all sizes.

How the Company Makes Money

Olo 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 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.

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.

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.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 6.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OLO, the sentiment is Neutral. The current price of 6.2 is above the 20-day moving average (MA) of 6.08, below the 50-day MA of 6.32, and above the 200-day MA of 6.12, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 49.99 is Neutral, neither overbought nor oversold. The STOCH value of 82.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for OLO.

Olo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KARO	75 Outperform	$1.32B	27.41	31.45%	2.49%	10.07%	31.38%
VTEX	71 Outperform	$896.21M	75.69	4.84%	―	12.50%	―
OLO	66 Neutral	$1.06B	―	-0.13%	―	24.81%	98.55%
Sector *	59 Neutral	$10.65B	10.45	-6.56%	3.01%	7.31%	-12.18%
SPT	59 Neutral	$1.22B	―	-39.88%	―	21.66%	8.66%
BLND	45 Neutral	$866.36M	―	-93.00%	―	3.30%	68.45%

Olo Corporate Events

Olo Announces Departure of Chief Revenue Officer

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.