Ocado delivers food but no profits after 13 years…

good times

Whenever we hear of panic in markets and ominous noises coming down the tracks it’s sometimes worth checking on a few market darlings. Ocado is not one of our darlings which means we’ve been wrong.  A quadrupling share price reflects all things optimistic in  the world of online commerce and in many cases justifiably so.

However, Ocado is 13 years old and did its IPO back in the summer of 2010. The most recent trading update reveals sales of £800 million but still losing £12.5m.  Don’t worry, forecasts suggest a profit next year which will put the valuation on circa 170x earnings or 3.5x sales.

Let’s just say there are plenty of believers in this food delivery franchise growing into its valuation and therefore we can deduct there isn’t a huge amount of panic in the market generally despite the headlines.

Value

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