Deliveroo PLC (GB:ROO) released its Q4 trading update for FY23 and expects its annual earnings to be “slightly” ahead of its guidance range. The company expects its adjusted EBITDA to surpass the guided range of £60-£80 million. Management cheered the resilient performance despite challenging times and attributed it to steady consumer demand.
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The company will announce its full-year results for FY23 on March 14, 2024, along with guidance for the next financial year.
Deliveroo operates as a marketplace, connecting customers in the UK with local partners to facilitate the delivery of food and essential items.
Q4 2023 Trading Update
For the year, Deliveroo posted a growth of 3% in its GTV (gross transaction value) on a constant currency basis. GTV is an important factor that measures the total size of orders for the company. The GTV for the UK market grew by 7% in constant currency compared to last year.
Meanwhile, the number of orders grew 1% in the UK & Ireland segment but declined 3% globally.
Revenue for the full year was down by 2% on a constant currency basis. This was mainly attributed to higher promotional marketing activity and targeted investment in consumer fees, aimed at leveraging the ongoing stabilization in consumer demand.
What is the Forecast for Deliveroo Shares?
Deliveroo’s stock is trading down by 2.15% at the time of writing. Over the last year, the stock gained more than 40%, driven by the recovery in its operations.
Analysts at Shore Capital noted that Deliveroo lost order share in Q4 2023 to rival Just Eat Takeaway (GB:JET) in the key UK & Ireland segment. Shore Capital has a Sell rating on Deliveroo shares. Interestingly, Bank of America analysts upgraded JET shares following its Q4 trading update.
According to TipRanks, ROO stock has received a Moderate Buy consensus rating based on four Buys, five Holds, and one Sell recommendation. The Deliveroo share price target is 160.56p, which is 20.7% above the current price level.
