About a week ago, Deliveroo warned its sales growth would be at the lower end of its previous guidance. They indicated the current macroeconomic conditions, such as the rising cost of living, had forced people to cut back on their takeaways, which has significantly impacted its bottom line.
The company also upgraded its adjusted earnings (EBITDA) margin guidance and indicated they were optimistic that by late 2023 to early 2024, it would be in a position where it is possible to break even.
Fortunately, the sales growth report adjustment looks to not have affected the markets by much. In yesterday’s trading session, we saw Deliveroo’s share price closing the markets with a 0.76 per cent price gain, reversing the previous two sessions that had been aggressively bearish. However, since the sales growth report was released, Deliveroo’s share price has also been aggressively bullish, which has resulted to an almost 10 per cent price gain in the markets.
Deliveroo Share Price Forecast
In the early hours of today’s trading session, Deliveroo is already up by 8 per cent, a higher growth rate than what it achieved in October. However, intraday trading is showing a lot of volatility, and as shown in the chart below, the company opened with a huge gap-up and quickly dropped by 4 per cent before resuming the bullish trend that started yesterday.
The chart below also shows the Williams Alligator pointing to a strong bullish trend, a price reversal. Therefore, my Deliveroo share price prediction for the next few trading sessions expects the current bullish trend to continue. There is a high likelihood that this month will see the share prices closing past 100p.
This is supported by recent fundamentals, including an improving economy and a strengthening Pound that has provided another tailwind for the company. However, a drop in Deliveroo share price below the 85p price level will invalidate my bullish analysis and signal a possible downturn in the markets.