🍔 Delivery Hero outperforms Just Eat
Delivery Hero SE (ETR: DHER) has been outperforming its Dutch rival, Just Eat Takeaway (AMS: TKWY), throughout 2024. Analyst Benjamin Kohnke from Stifel highlights Delivery Hero as the better stock pick due to its strong focus on profitability. In a research note published this Tuesday, Kohnke mentioned that Delivery Hero’s stock could rise by 60% within the next year. This comes after the company's stock already doubled in the past three months. Just Eat, on the other hand, is expected to grow by only 17%.
📊 Profitability drives potential growth
One of the key reasons analysts favor Delivery Hero is its management’s commitment to profitability. Stifel projects that the company will achieve an adjusted EBITDA margin of 2.8% and a free cash flow margin of 6.0% by fiscal 2026. Unlike its competitors, Delivery Hero isn't chasing growth at all costs but is rather unlocking the true value of its business model by focusing on long-term profitability.
🌍 IPO expectations and market dynamics
Adding to the optimism, Delivery Hero's upcoming listing of its Middle Eastern subsidiaries on the Dubai Financial Market (DFM) is expected to drive its stock price higher in 2025. According to Deutsche Bank, this move will attract significant investor interest. Delivery Hero is still trading 70% below its peak during the pandemic, when demand for food delivery was at its highest, making its stock more attractive today.
🍽️ Just Eat's slower pace
While Just Eat Takeaway remains strong in Northern Europe, its growth rate is slower compared to Delivery Hero’s. Between 2019 and 2023, Just Eat reported an annual growth rate of 17%, while Delivery Hero soared with 38%. Lower interest rates in 2024 are also likely to benefit Delivery Hero more as consumers have more disposable income to spend on food delivery services. Earlier this year, Delivery Hero sold its Taiwan operations to Uber for $1.25B, strengthening its financial position further.
Will Delivery Hero leave Just Eat Takeaway in the dust?
