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Just-Eat, just launched, just price?
Just-Eat, the fast-growing online takeaway service, opened up almost 10 percent from the IPO price at 260 pence when it launched in London on Thursday. Saxo Bank's Peter Garnry says the delivery company "is a fantastic growth story" and the journey "has just started".
Just-Eat's revenue grew by 62 percent in 2013 and Peter expects that the high growth rates will continue, with revenue hitting almost GBP 200 million in 2015.
The company's business model is extremely simple on the surface. It takes a 10 percent cut of any online order made through its site allowing takeaway restaurants to expand their sales coverage.
But Peter warns that despite these "very attractive growth rates", the valuation cannot be justified. Firstly, given the simplicity of the business model and increasing competition there is a real threat to the pricing and thus profitability going forward. And in 2013, the company delivered a EBITDA margin of 11.2 percent, which Peter says is very low, given the minimal requirement for capex to accelerate the business.
Furthermore, Just-Eat's Berlin-based competitor - Delivery Hero - has just secured USD 88 million in financing to accelerate its growth.
Read more about Peter Garnry's predictions here:
http://www.tradingfloor.com/posts/just-eat-electrifies-ipo-frenzy-aggressive-valuation-82314555
01:28 minutes
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