Delivery Hero SE has been outperforming its Dutch rival Just Eat Takeaway.com. NV since January of this year.
The Berlin-based company is still not done. Benjamin Kohnke of Stifel analysts believes that Delivery Hero will continue to outperform TKWY by 2025.
Kohnke predicts modest growth of 17% for Just Eat Takeaway, but recommends Delivery Her as the best option to take advantage of the ongoing growth within the online food sector.
In a Tuesday research note, he said that Delivery Hero could generate a 60% profit over the next 12 months.
What is the future of Delivery Hero?
Stifel is still bullish about Delivery Hero. It notes that the company’s management has a full commitment to profit rather than growth at any cost, and this could “unearth” the value inherent in the model.
Delivery Hero is expected to achieve an EBITDA adjusted margin of 2,8% by 2026 and free cash flow yields of around 6.0%.
The shares of this German company will also become more appealing, as its Middle Eastern subsidiaries are expected to be listed on Dubai Financial Market.
Deutsche Bank analysts expect that the value of this investment will increase by 2025.
Delivery Hero stock has fallen over 70% from its high during the COVID-19 Pandemic. This was a time when food delivery services were in great demand.
Just Eat Takeaway’s growth is much slower
Kohnke doesn’t expect Just Eat Takeaway will be as profitable an investment as Delivery Hero because it grows at a slower rate than the German equivalent.
The research note says that despite a solid financial profile and improved performance in the UK TKWY’s growth rate remains significantly lower than its peers. This justifies a discount in valuation.
Stifel’s analyst thinks that Delivery Hero will be better equipped to compete with global giants like DoorDash Grab and Uber.
Just Eat Takeaway grew at an annual compound growth rate (CAGR) of 17% between 2019 and 2023, while Delivery Hero grew at a rate impressively 38%.
Kohnke believes that Delivery Hero shares will continue to rise, particularly since central banks around the world have started cutting rates.
Reduced borrowing costs can increase the number of orders placed for delivery services.
Delivery Hero’s Taiwan operation was sold to Uber earlier this year for $1.25 Billion.
Just Eat Takeaway Vs. Which stock will deliver a 60% gain in the next months? This information may change as new updates are released
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