In major news on UK stocks, Deliveroo PLC (GB:ROO) shares rallied almost 6%, as of writing, as the company’s order growth revived in the first quarter of FY24. As per the company’s trading update, orders experienced a 2% year-on-year growth to 73.5 million in Q1. The gross transaction value (GTV) per order of £24.9 marked a 4% increase in constant currency terms.
Deliveroo operates as a marketplace, connecting customers in the UK with local partners to facilitate the delivery of food and essential items.
Deliveroo’s Positive Quarterly Growth
In the first quarter, Deliveroo’s revenue grew by 2% in constant currency to £514 million. The overall GTV increased by 6% year-on-year to £1.83 billion in constant currency terms. GTV serves as a crucial metric, reflecting the total value of orders processed by the company.
Among its regions, the UK and Ireland (UKI) market continued to show resilience, with 6% year-on-year GTV growth. In international markets, Deliveroo saw a 6% year-on-year increase in its GTV, compared to 1% in the previous quarter. This growth was driven by increased orders, particularly in France, the UAE, Hong Kong, and Italy.
Looking ahead, Deliveroo reaffirmed its full-year guidance for FY24, with GTV growth expected to be between 5% and 9%. Additionally, the company expects its adjusted EBITDA in the range of £110 million to £130 million, with positive free cash flow projected for the full year.
Morgan Stanley Sticks to Buy Rating for ROO
Post-update, Luke Holbrook from Morgan Stanley confirmed his Buy rating on ROO stock, predicting a growth rate of 16%. Stanley stated that the market will react positively to the update, including the GTV growth, stable revenues, improved metrics in international markets, and resilience in the UK market.
What is the Forecast for Deliveroo Shares?
According to TipRanks consensus, ROO stock has received a Strong Buy rating based on four Buys and one Hold recommendation. The Deliveroo share price target is 171.40p, which is 34% above the current price level.
