Delivery Hero: Market Mispricing, A Global Delivery Giant With Room To Run

2025-04-30 23:30:42 ET

Summary

• The stock trades at an attractive valuation of less than 1x price-to-sales and 0.16x price-to-GMV, despite being adjusted–EBITDA positive and growing at double-digit rates annually.
• Delivery Hero's current market capitalization is close to the value of its 80% stake in UAE-based Talabat alone, which suggests significant undervaluation of the rest of the business.
• In 2024, DHERO achieved $700MM in EBITDA and $100MM in FCF. For 2025, the company is guiding towards $1B in EBITDA and $200MM in FCF.
• Profitability is beginning to take hold, with customer cohorts showing healthy retention and increasing order frequency. Asset sales, particularly in Asia, are helping the company concentrate resources on its core and more profitable markets.
• Recent market transactions, including Uber's acquisition offer for Foodpanda in Taiwan, the Talabat IPO in the UAE, and the DoorDash offer for Deliveroo, indicate market appetite for similar businesses.

Delivery Hero (DHERO) (DLVHF) trades at a steep discount (P/S below 1), influenced by various factors impacting investor sentiment. Among these are years of unprofitable results in the industry, potential antitrust and regulatory issues in the European Union. Also, growing concerns about heavily funded competitors, particularly Meituan , have intensified, especially in the Asian markets where Delivery Hero faces lower gross margins....

Read the full article on Seeking Alpha

For further details see: