2023-09-15 16:29:36
Many people have already put the corona pandemic behind them. For others it still plays an important role. In the economy, for example, the effects of the upheavals caused by Covid-19 are still being felt to some extent. This is also the case with the cooking box mailer Hellofresh. The company, which supplies various recipes with appropriate instructions and ingredients down to the gram, benefited from people having to stay at home more often during the pandemic. Many apparently wanted to try something out and prepare their own food instead of ordering the ready-made dishes from their trusted delivery service.
This ensured that Hellofresh shares soared and were counted among the “Corona profiteers” on the stock market. The euphoria reached a peak in mid-November 2021. The share price climbed to an all-time high of 97.50 euros. At times the paper was even part of the German leading index Dax. But disillusionment has now set in.
Share price far from previous highs
The Hellofresh share can now be found in the second German stock market league M-Dax. The price is currently around the 32 euro mark. At times the prices also fell to 15 euros, which corresponds to a price loss of around 85 percent compared to the high.
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While the stock is far from previous highs, at least the recovery from the lows is underway. This is progressing well. With a price increase of more than 55 percent, the Hellofresh share has been one of the top stocks in the M-Dax since the beginning of the year, while the index itself has only gained almost 8 percent in value over the course of the year so far.
Sales and customer numbers declining
However, Hellofresh’s future path will not be easy. Although progress in profitability is noticeable, it is rather slow, while growth has recently become a problem area. In the second quarter of 2023, sales revenue fell by 2 percent to 1.92 billion euros compared to the previous year. At least a slight increase of 2 percent was achieved on a currency-adjusted basis. Management expects growth of 2 to 8 percent for the current financial year, although the upper end of the forecast has been slightly lowered. Previously this was 10 percent.
FAZ.NET columnist Christoph Scherbaum is a stock market expert and works as a financial journalist in Ludwigsburg. : Image: Christoph Scherbaum
Just as unpleasant: the number of active customers fell by 8.7 percent to 7.3 million. These are all not good signals from a company that sees itself in the areas of growth and technology. However, the forecast for adjusted earnings before interest, taxes, depreciation and amortization (AEBITDA) was raised slightly from 460 to 540 million euros to 470 to 540 million euros. Every investor must decide for themselves to what extent such an adjustment actually makes sense. One thing is clear: classic black numbers look different.
Analysts are optimistic again
However, the latest figures and the forecast were largely well received by analysts. But Berenberg analyst Trion Reid also says that the market’s attention is focused on the second half of the year. The key question is whether the food delivery service can return to growth after the pandemic and improve its profitability with falling marketing costs. Apparently Reid answers this question with a “yes.” Finally, he has the Hellofresh share with a “Buy” rating and a price target of 41.00 euros. In the event of sustainable, profitable growth, the share would also be valued favorably, the analyst continued.
At JP Morgan, Hellofresh shares have now even made it onto the “Analyst Focus List”. Analyst Marcus Diebel has also issued a “Positive Catalyst Watch”. Such a status is intended for stocks whose short-term price development is assessed as particularly optimistic. From an analyst perspective, the meal kit mail order company has seen strong momentum in its most important business metrics. The price target was therefore increased from 31.00 to 38.00 euros. The “Overweight” rating is confirmed.
Christoph Scherbaum Published/Updated: , Recommendations: 6 Hanno Mußler Published/Updated: Recommendations: 14 Daniel Mohr Published/Updated: , Recommendations: 5
Orders for meal kits have declined since the end of Corona, but the bottom line is that Hellofresh was able to take advantage of the crisis and make itself better known. But one thing is also clear: the company focuses on growth and less on profitability. A value investor is more likely to give this stock a wide berth. On the other hand, if you like high-growth companies, HelloFresh would be an interesting representative in the German mid-cap segment.
#Hellofresh #postcorona #hangover