Is the Deliveroo Share Price at a Discount Ahead of Earnings?

The Deliveroo (LSE: ROO) share price will be in the spotlight ahead of the company’s quarterly and half-year results. The stock ended the week at 325p, which was about 45% above its lowest level ever. This valued the firm at almost 6 billion pounds.

Deliveroo earnings ahead

The Deliveroo share price will be in focus as the company publishes its quarterly results on Wednesday following its disastrous public debut early this year. The results come at a time when the company has seen its stock perform well in the past few months. This performance happened after the company won a case about worker classification in the UK and upgraded its full-year results. The firm also announced its decision to exit the Spanish market. 

In its Q2 trading update, the firm said that it expects its gross transaction level (GTV) to grow by 76% to 1.3739 billion pounds. This growth was led by its UK and Ireland businesses. Its international segment grew by 65%. At the same time, the number of orders rose by 88% YoY to more than 78 million. Most of these sales were in the international segment, where orders rose to 40 million. The firm also confirmed its full-year gross profit margin guidance. 

Therefore, with the company doing well, there is a possibility that it will attract London’s fund managers, who have shunned the company because of its ownership model. Also, there is a possibility that a moneyed company will make a bid for the firm citing its low valuation. Amazon, which already owns some of Deliveroo could move to acquire the firm. This is just speculation though.

Deliveroo share price forecast

The Deliveroo share price has been in a strong bullish trend in the past few weeks. Still, the stock remains about 16% below the highest point on record. The stock has been above the 25-day and 50-day moving averages. It is also slightly below the key resistance level at 338p. This price is above the ascending trendline shown in red. 

Therefore, I suspect that the stock will maintain a bullish trend as investors attempt to retest the all-time high of 390p. This action will be confirmed if the price rises above the key resistance at 338p. On the flip side, a drop below the support at 320p will invalidate this view. This prediction is in line with my Deliveroo share price long term forecast.

Deliveroo Share price