That’s right Delivery (LSE: ROO) The initial public offering (IPO) six months ago was catastrophic. Since then, delivery stock prices have experienced a roller-coaster ride. Looking at things today, should I buy shares for my portfolio or avoid them?
Delivery share price rollercoaster
When Deliveru decided to float London Stock Exchange (LSE) Back in March, there was a feeling of excitement in the air. Unfortunately, the IPO was not successful. Deliver .6 floating at 390p per share with a price of 7.6bn. At the end of the first day trading, the stock closed at 287p per share. A month later and has fallen to a low of 228p per share.
Since that low, Deliveru share prices have returned amid some positive results and an increase in investor sentiment. In fact, at this time last month, the levels had surpassed the IPO price of Rs 0p and on August 1, the stock was trading at Rs 55 per share. Since then, however, the stock has fallen once more. I am writing, trading 316p per share. A recent positive trading report and a German company buying shares in Deliveru has benefited the share price but the resumption has further narrowed the issues in my opinion.
Positive and negative
I have weighed some positive aspects, as well as negatives and risks of buying delivery shares for my portfolio.
- Positive: The recent performance has been great. Revenue rose 822% for the six months from January to June, according to a half-yearly report released last month. If this trend continues, the delivery share price may rise and once again exceed the IPO level.
- Negative: During the epidemic, Deliveru reported bright sales as more consumers relied on home food supplies. Now that the economy has revived and consumers are eager to take the initiative once again, I think delivery sales can be a hit, especially since the cost of delivered food is more than ordering directly from a restaurant.
- Positive: Recently, German food delivery Titan Delivery Hero Bought a 5% stake in Deliveru, which benefited Deliveru’s share price. There are also rumors of occupation. Delivery Hero will, in my opinion, enhance the profile, offer and geographic footprint of the delivery.
- Negative: Investing in the Deliverru platform has been costly to date and will continue to be so in the near future. Analysts predict that Delivery will not make a profit until 2024 as soon as possible. This will affect investor sentiment and potentially lower the value of the delivered stock in my opinion.
- Positive: Deliveru continues to diversify its platform and add more restaurants. In Q2 alone, it added 10,000 new sellers to its platform. It has continued to add new revenue streams to its arsenal. For example, it has been merged Boots Provide home delivery of health and beauty products.
- Negative: Competition will affect the progress of the delivery. There are big players out there who are fighting for market share Just eat And UberEats and many smaller platforms.
Overall I believe that the price of the Deliver share will continue to fluctuate in the near future. Personally, I will not buy delivery shares for my portfolio right now. I believe the negatives outweigh the positives and I will not feel comfortable investing my hard-earned money. However, I will keep a close eye on the development.
The post My verdict on the share price of Deliveru is published here in The Motley Fool UK.
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Jabran Khan has no position in any of the mentioned shares. The opinions expressed in the companies mentioned in this article may differ from those of the authors and therefore the official recommendations we make on our subscription services such as Share Advisors, Hidden Winners and Pro. Here at The Motley Flower we believe that considering a variety of insights makes us a better investor.