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1. Company Snapshot

1.a. Company Description

Deliveroo plc operates an online food delivery platform.The company connects local consumers, restaurants and grocers, and riders to fulfil a purchase.It operates approximately more than 800 locations across 11 markets, including Australia, Belgium, France, Hong Kong, Italy, Ireland, the Netherlands, Singapore, the United Arab Emirates, Kuwait, and the United Kingdom.


The company was founded in 2013 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on ROO

Deliveroo's recent performance was driven by a surge in sales and orders, as customers returned for more. The company's drone delivery service expansion, in collaboration with GoTo Foods, and enhanced AI supply chain capabilities, via RELEX Solutions, demonstrate its strategic innovation efforts. Additionally, the proposed $3.9 billion acquisition by DoorDash, a major player in the industry, has sparked interest and potentially boosted investor confidence.

1.c. Company Highlights

2. Deliveroo’s 2024 Earnings Highlight Strategic Growth and Operational Efficiency

Deliveroo reported a strong 2024, with a 6% growth in GTV and adjusted EBITDA of £130 million, marking a 52% year-on-year increase. The company achieved its first statutory net profit and positive free cash flow, signaling a significant shift toward profitability. Despite exiting the Hong Kong market, Deliveroo demonstrated resilience, with an 8% GTV growth ex-Hong Kong. The company’s ability to balance growth with operational efficiency has been a key driver of its performance.

Publication Date: Apr -08

📋 Highlights
  • Strong Financial Performance:: Deliveroo achieved 6% GTV growth and £130 million adjusted EBITDA, up 52% year-on-year, with statutory net profit and positive free cash flow for the first time.
  • Customer Retention and Marketing Efficiency:: A 10% improvement in marketing spend efficiency, with a 20% improvement in the UK, driven by better targeting, personalization, and promotions.
  • Rider Logistics Optimization:: Improved rider efficiency, with orders per rider per hour increasing by 50% in the UK, supported by e-bikes, dynamic pricing, and route optimization.
  • Market Exit and Expansion:: Despite exiting the Hong Kong market, Deliveroo achieved 8% GTV growth ex-Hong Kong, focusing on profitable markets and scaling opportunities.
  • 2026 EBITDA Margin Target:: Deliveroo aims for a 4% EBITDA margin by 2026, driven by rider efficiency, scale effects, and cost optimization across markets.

Financial Performance and Margins

Deliveroo’s adjusted EBITDA margin improved to 1.3% in 2024, up from 0.8% in 2023, reflecting the company’s focus on cost optimization and revenue growth. The UK market, a key contributor, saw EBITDA turn positive in 2024, while France and Germany also demonstrated progress. The company’s free cash flow of £86 million, coupled with £120 million in share buybacks, underscores its commitment to returning value to shareholders. The pro forma cash position of £500 million after the additional buyback highlights its financial flexibility.

Growth Initiatives and Operational Efficiency

Deliveroo’s 2025 outlook is optimistic, with a target of high single-digit GTV growth and adjusted EBITDA of £170-190 million. The company is focusing on price value, loyalty programs, and delivery efficiency to drive growth. For instance, the UK saw a 200 basis point reduction in menu prices, driving order growth, while Gold subscribers increased by 30% in the UK and France. Will Shu emphasized, “We’re driving this through, for example, better rider efficiency, better ad revenue, and better cost efficiency.”

Rider Logistics and Cost Optimization

Rider efficiency has been a critical area of improvement, with the UK seeing a 50% increase in orders per rider per hour over three years. Deliveroo plans to replicate this success in international markets. The introduction of dynamic pricing and route optimization has further enhanced efficiency, with multi-pickup stacking increasing stacked orders by 50% and reducing rider wait times by 3%. These initiatives contributed to a 90 basis point reduction in cost of sales.

Valuation and Market Outlook

Deliveroo’s valuation metrics suggest a premium pricing multiple, with a TTM PE ratio of 240.77 and a price-to-sales ratio of 0.85. The company’s focus on margin expansion and free cash flow generation positions it well for future growth. The UAE market has shown resilience, with high customer loyalty and a differentiated value proposition, despite intense competition. Deliveroo’s strategic initiatives, including share buybacks and cost optimization, align with its goal of achieving a 4% EBITDA margin by 2026.

Risk Factors and Market Dynamics

Despite the positive momentum, challenges remain, including regulatory uncertainties and macroeconomic factors. The UK market’s recovery from tax changes in Q1 2024 will be a key indicator of its resilience. Additionally, the company’s decision to exit Hong Kong underscores its strategic focus on profitable markets. As Deliveroo looks to 2025, its ability to maintain operational efficiency and execute its growth strategy will be crucial to meeting its targets and delivering long-term value to shareholders.

3. NewsRoom

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Doordash upgraded as Jefferies says it is set to under-promise and over-deliver

Nov -19

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DoorDash Inc (DASH) Q3 2025 Earnings Call Highlights: Strategic Investments and Growth Trajectory

Nov -06

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DoorDash slides on earnings miss and higher spending plans

Nov -05

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DoorDash slides 9% on earnings miss and higher spending plans

Nov -05

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Stifel Raises DoorDash (DASH) Price Target to $255 After Deliveroo Deal Completion

Nov -03

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.30%)

6. Segments

On-demand Food Platform

Expected Growth: 10.3%

Growing demand for online food delivery, increasing adoption of digital platforms, and expansion into new markets drive Deliveroo's growth. The company's focus on customer convenience, wide restaurant network, and efficient logistics also contribute to its growth.

7. Detailed Products

Food Delivery

Deliveroo's core product, allowing customers to order food from a wide range of restaurants and have it delivered to their doorstep.

Grocery Delivery

Deliveroo's grocery delivery service, allowing customers to order essential items and have them delivered quickly.

Deliveroo Plus

A subscription-based service offering unlimited free delivery, exclusive discounts, and priority customer support.

Deliveroo for Business

A corporate catering service, allowing businesses to order food for their employees and clients.

Marketplace+

A platform allowing restaurants to manage their own delivery operations, with access to Deliveroo's customer base and logistics network.

8. Deliveroo plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Deliveroo's services can be substituted with other food delivery services like Uber Eats, Just Eat, and Foodpanda. However, Deliveroo's strong brand recognition and large network of restaurants and riders provide some protection against substitution.

Bargaining Power Of Customers

Customers have some bargaining power due to the availability of alternative food delivery services. However, Deliveroo's user-friendly app and wide range of restaurants reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Restaurants and food establishments have some bargaining power due to their importance in Deliveroo's business model. However, Deliveroo's large network of restaurants and riders reduces the bargaining power of individual suppliers.

Threat Of New Entrants

The threat of new entrants is high due to the relatively low barriers to entry in the food delivery market. New entrants can easily replicate Deliveroo's business model, posing a significant threat to the company.

Intensity Of Rivalry

The intensity of rivalry in the food delivery market is high due to the presence of several established players like Uber Eats, Just Eat, and Foodpanda. Deliveroo faces intense competition in terms of pricing, service quality, and customer acquisition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 10.49%
Debt Cost 3.95%
Equity Weight 89.51%
Equity Cost 5.75%
WACC 5.56%
Leverage 11.71%

11. Quality Control: Deliveroo plc passed 5 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
Dunelm

A-Score: 5.7/10

Value: 4.8

Growth: 4.9

Quality: 6.4

Yield: 9.4

Momentum: 3.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Deliveroo

A-Score: 5.3/10

Value: 4.6

Growth: 8.1

Quality: 4.6

Yield: 0.0

Momentum: 7.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Frasers

A-Score: 4.8/10

Value: 7.4

Growth: 6.6

Quality: 4.9

Yield: 0.0

Momentum: 3.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Just Eat Takeaway

A-Score: 4.3/10

Value: 4.4

Growth: 5.7

Quality: 2.7

Yield: 0.0

Momentum: 9.0

Volatility: 4.0

1-Year Total Return ->

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JD Sports Fashion

A-Score: 4.1/10

Value: 8.1

Growth: 7.0

Quality: 5.0

Yield: 0.6

Momentum: 2.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Zalando

A-Score: 3.7/10

Value: 5.2

Growth: 6.4

Quality: 4.8

Yield: 0.0

Momentum: 3.0

Volatility: 2.7

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

1.8$

Current Price

1.8$

Potential

-0.00%

Expected Cash-Flows