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1. Company Snapshot

1.a. Company Description

HelloFresh SE delivers meal kit solutions to prepare home-cooked meals using its recipes.The company offers premium meals, double portions, and others, as well as add-ons, such as soups, snacks, fruit boxes, desserts, ready-to-eat meals, and seasonal boxes.It also sells meal-kits through vending machines.


The company has operations in the United States, Australia, Austria, Belgium, Canada, Germany, France, Luxembourg, the Netherlands, New Zealand, Switzerland, Sweden, Denmark, Norway, Italy, Japan, and the United Kingdom.It operates under the HelloFresh brand; and owns the Chefs Plate, EveryPlate, Factor75, Green Chef, and YouFoodz brand names.HelloFresh SE was founded in 2011 and is headquartered in Berlin, Germany.

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1.b. Last Insights on HFG

HelloFresh SE's recent performance was driven by institutional owners' significant influence and potential undervaluation. Key insights suggest that institutions' substantial holdings imply they have substantial influence over the company. Additionally, a 2-stage free cash flow to equity analysis estimates HelloFresh's fair value at €22.82, indicating potential undervaluation. Furthermore, the company's recent share buyback activity could be a positive catalyst, reducing outstanding shares and benefiting shareholders. However, the recent investigation by the US Labor Department over allegations of migrant teen labor usage at one of its facilities may pose a risk to the company's reputation and operations.

1.c. Company Highlights

2. HelloFresh's Q3 Results: A Step in the Right Direction

HelloFresh's Q3 revenue declined by 9% in constant currency, driven by a double-digit decline in orders, somewhat offset by a 4% increase in Average Order Value (AOV). The adjusted EBITDA came in at EUR 40.3 million, with a double-digit adjusted EBITDA margin in meal kits. The EPS came out at -0.29089, missing estimates at 1. The company's efforts to improve unit economics and profitability are yielding results, with multiple customer satisfaction metrics trending at record highs.

Publication Date: Nov -30

📋 Highlights
  • Revenue Decline Mitigated:: Q3 revenue dipped 9% in constant currency, driven by 13% fewer orders, partially offset by a 4% rise in average order value (AOV).
  • Adjusted EBITDA Stability:: Reported EUR 40.3 million, maintaining a double-digit margin despite seasonal marketing costs and FX headwinds.
  • Efficiency Program Progress:: 70% of EUR 300 million cost-cutting initiatives implemented, driving a EUR 140 million year-to-date free cash flow improvement.
  • ReFresh Strategy Impact:: U.S. menu options expanded to 100+ weekly choices (up from 60 in early 2025), boosting product retention and customer lifetime value.
  • Cohort Retention Gains:: Post-pivot cohorts showed 6% higher retention at 10 weeks and 8.4% at 20 weeks compared to prior periods.

Segment Performance

The meal kits segment saw a continuation of the trends previously seen, with a sequential deceleration of revenue decline for the third quarter in a row. The Ready-to-Eat (RTE) segment also showed encouraging trends, with September exit rates at better levels than in July and August. Group orders were down by about 13% year-over-year, with meal kits improving sequentially for the third quarter in a row.

Operational Efficiency

HelloFresh has made meaningful progress with its EUR 300 million efficiency program, with 70% of initiatives implemented. The company has also seen a significant improvement in free cash flow before leases, with a year-to-date improvement of over EUR 140 million. As Fabien Simon, the new CFO, noted, "We've made significant progress, and our organization's velocity has increased substantially."

Outlook and Valuation

The company expects sequential improvements for both RTE and meal kits in constant currency in Q4. The adjusted EBITDA is expected to be similar to last year in absolute euro terms. With a P/S Ratio of 0.14 and an EV/EBITDA of 3.82, the market is pricing in a significant recovery. Analysts estimate next year's revenue growth at -1.5%. Given the current valuation multiples, the stock may be attractive for investors looking for a turnaround story.

Return Metrics and Debt

HelloFresh's return metrics are negative, with an ROE of -21.02% and an ROIC of -8.11%. The Net Debt / EBITDA ratio is 0.92, indicating a manageable debt burden. The Free Cash Flow Yield is 24.84%, which is a positive sign.

3. NewsRoom

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Investors Are Debating Which Companies Won't Survive The Next 10 Years. 'Every Time I Go, There's Almost Nobody In The Store'

Nov -20

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HelloFresh Harnesses AI to Accelerate Delivery of Chef-Created Recipes

Nov -19

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Can HelloFresh (XTRA:HFG) Sustain Management Credibility Amid Revenue Pressures and Governance Scrutiny?

Nov -11

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HelloFresh (XTRA:HFG) Valuation in Focus Following Grizzly Research Short Report and Share Price Drop

Nov -09

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Analysts Are Updating Their HelloFresh SE (ETR:HFG) Estimates After Its Third-Quarter Results

Nov -02

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Meals that Give Back: HelloFresh and Chef Tini Younger Unveil Exclusive Seasonal Menu Items Benefiting No Kid Hungry

Oct -29

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With 62% ownership of the shares, HelloFresh SE (ETR:HFG) is heavily dominated by institutional owners

Oct -14

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The Pets Table Brings Nutritious Air-Dried Dog Food to PetSmart Customers Nationwide

Oct -13

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.51%)

6. Segments

Food Solutions

Expected Growth: 2.5%

HelloFresh SE's Food Solutions segment growth of 2.5% is driven by increasing demand for convenient meal kits, expansion into new markets, and rising health-conscious consumers seeking home-cooked meals. Additionally, the company's focus on sustainability, quality, and variety of recipes, as well as its strong brand recognition and customer loyalty, contribute to its growth momentum.

Other

Expected Growth: 3.5%

HelloFresh SE's 3.5% growth is driven by increasing demand for meal-kit delivery services, expansion into new markets, and strategic partnerships. The company's focus on customer convenience, healthy eating, and sustainability resonates with consumers. Additionally, investments in technology and logistics have improved operational efficiency, enabling the company to scale effectively.

7. Detailed Products

Classic Plan

A weekly delivery of ingredients and recipes to cook 3 meals for 2 or 4 people

Veggie Plan

A weekly delivery of ingredients and recipes to cook 3 vegetarian meals for 2 or 4 people

Omnivore Plan

A weekly delivery of ingredients and recipes to cook 3 meals with meat, fish, and vegetables for 2 or 4 people

Carnivore Plan

A weekly delivery of ingredients and recipes to cook 3 meat-centric meals for 2 or 4 people

Quick and Easy Plan

A weekly delivery of ingredients and recipes to cook 3 quick and easy meals for 2 or 4 people

Low Carb Plan

A weekly delivery of ingredients and recipes to cook 3 low-carb meals for 2 or 4 people

Vegan Plan

A weekly delivery of ingredients and recipes to cook 3 vegan meals for 2 or 4 people

8. HelloFresh SE's Porter Forces

Forces Ranking

Threat Of Substitutes

HelloFresh SE operates in a market with moderate threat of substitutes. While there are some alternatives to meal-kit delivery services, such as grocery stores and restaurants, HelloFresh's unique value proposition and strong brand recognition help to mitigate this threat.

Bargaining Power Of Customers

HelloFresh SE has a large customer base, but individual customers do not have significant bargaining power. The company's subscription-based model and high customer retention rates also reduce the bargaining power of customers.

Bargaining Power Of Suppliers

HelloFresh SE relies on a network of suppliers for ingredients and packaging materials. While the company has some bargaining power due to its scale, suppliers of certain ingredients may have some bargaining power due to their specialized products.

Threat Of New Entrants

The meal-kit delivery market is highly competitive, and new entrants can easily enter the market. HelloFresh SE's strong brand recognition and established logistics network help to mitigate this threat, but the company must continue to innovate to stay ahead of new competitors.

Intensity Of Rivalry

The meal-kit delivery market is highly competitive, with several established players competing for market share. HelloFresh SE must continue to differentiate itself through its product offerings and customer service to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 21.11%
Debt Cost 3.95%
Equity Weight 78.89%
Equity Cost 3.18%
WACC 3.34%
Leverage 26.76%

11. Quality Control: HelloFresh SE passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Fuller Smith & Turner

A-Score: 5.2/10

Value: 7.8

Growth: 5.8

Quality: 3.4

Yield: 5.6

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Young's

A-Score: 4.6/10

Value: 5.6

Growth: 4.0

Quality: 3.1

Yield: 3.8

Momentum: 3.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Wetherspoon

A-Score: 4.4/10

Value: 7.4

Growth: 5.1

Quality: 2.7

Yield: 1.2

Momentum: 3.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Marstons

A-Score: 4.3/10

Value: 9.1

Growth: 5.7

Quality: 3.1

Yield: 0.0

Momentum: 3.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
HelloFresh

A-Score: 3.2/10

Value: 8.9

Growth: 5.3

Quality: 3.4

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
Elior

A-Score: 2.8/10

Value: 7.1

Growth: 3.2

Quality: 1.9

Yield: 0.0

Momentum: 2.0

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.07$

Current Price

6.07$

Potential

-0.00%

Expected Cash-Flows