- OCDO stock price: The company is focused on growth it is reinvesting heavily in itself
- The revenue of the firm is growing at a CAGR of 9.27%
- The stock is taking support from its 50 EMA and is looking to make a breakout soon.
Ocado Group Plc is a publicly traded company on the London Stock Exchange. It is primarily involved in operating an online grocery supermarket. The company operates through three segments: Retail, Logistics, and International Solutions. It was founded in 2000 and is headquartered in Hatfield, United Kingdom.
The income statement and the balance sheet
In its financial reports, the company has reported its 2022 revenue to be £2.5B, the gross profit was £629M which is 25%. However, the firm is burning its funds on operations and hence its is Earnings before interest and taxes (EBITDA) negative.
In the balance sheet, the cash is going down from the past 3 years. which is declining the current ratio. However, the current ratio of the firm is still on the better side of 2.46%. One of the major things to note is the amount of debt on the Non-current liability side and its comparison with the reserves the company has. The debt-to-equity ratio is high, at 1.20 which means the supermarket giant may have problems with debt solvency.
Overall, financially the firm is struggling to keep on its net profit, let alone cash-positive. This indicates that the company is heavily focused on growth, as it is still in a mid-market of £6B. This decision of the management seems to be working as Ocado’s revenues have grown over the past few years with a CAGR of 9.27%
Technical Analysis and Price Prediction of OCDO Stock
As of this writing, the OCDO stock price is trading at a level of £763 while it has taken support of its 50 EMA to surge up further, which is currently at £756. On the other hand, the level of £879 can cause problems for the bulls as it is Immediate resistance for the bulls. Similarly, the immidiate support level is near its 50 EMA, at £754.
The Moving average indicators like the MACD and RSI are in a downtrend. The MACD made a bearish crossover with its EMA earlier this month, while the RSI made a bearish crossover with its SMA back around the same time.
At present, the MACD line is at 2.35 and the RSI is at 43. If the stock falls below the current level, the RSI line is likely to touch its oversold level of 30.
Conclusion
The price prediction for the OCDO stock will be bullish if the bulls are able to reclaim the support level of £754. However as the 50 EMA has given major support, it will possibly not break. If the stock is reclaimed, it will rise to its first resistance level
Technical Levels
Support levels: £754 and £618
Resistance levels: £879 and £977
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets or stocks comes with a risk of financial loss.