Ocado Group Earnings: Stock Plummets 17% as Solutions Expansion Slows

No-moat Ocado reported consolidated results for the 52-week period ended Dec. 1, reaching GBP 3.156 billion in revenue, representing 14% year-over-year growth. Adjusted EBITDA reached GBP 153 million, ahead of company-compiled consensus. However, despite solid operating results, the stock plunged 17% at market opening on Feb. 27 due to a slower-than-expected growth pace for automated warehouses under its technology solutions division. Ocado still expects to open at least seven new customer fulfillment centers, or CFCs, in the next three years and projects the division to contribute around 10% revenue growth in fiscal 2025. With our long-term estimates unchanged, we maintain our fair value estimate of GBX 920.