KR - Ocado Group Building An Interesting 2-Part E-Commerce And E-Commerce Service Model

• Ocado's U.K. Retail JV with Marks & Spencer offers leverage to a fast-growing U.K. online grocery market, while the Solutions business offers a complete end-to-end automated online logistics solution.
• Ocado is investing heavily in hardware and software capabilities that automate the ordering, stocking, picking, and fulfillment functions needed to operate an online retail operation.
• By charging of a fee based on revenue generated through its facilities, Ocado is essentially providing a "logistics as a service" model that alleviates capital and setup risk for customers.
• Ocado shares do look undervalued on long-term revenue growth of over 10% and mid-single-digit FCF margins, but the field is likely to get more competitive and the small modeling changes drive significant FV changes.

For further details see: