Top Food Delivery Stocks to Look Out For in 2023

The growth of the online market has been substantial in the 21st century, impacting the way consumers eat, shop and take on everyday tasks. This has created a market of strong competition and innovation, and the introduction of the pandemic has only enhanced this.

As a result, the food delivery industry has boomed. The rising demand for convenience, as well as the popularity of online ordering, has offered an opportunity to invest in some of the most popular food delivery stocks.

Deliveroo (ROO)

Deliveroo is a major food delivery player, operating in ten countries including the UK, Ireland and France. The stock has had a difficult time since its IPO in 2021, but its significant decline since then has offered an opportunity to invest in Deliveroo at a cheap price.

Additionally, the company has been growing its revenue despite the end of lockdown restrictions. The group reported revenue grew 5% to £1.02bn and gross profit gained 23% in its interim results. Deliveroo has reported a resilient first-half performance given the challenging economic conditions.

Uber (UBER)

Uber is widely known across the globe, and its food delivery app Uber Eats is just as popular. Uber stock is having an impressive year so far, jumping over 70% as the group diversifies its model and continues to work towards its path of profitability.

However, our focus is on Uber Eats. The firm has recently partnered with Nvidia to deploy up to 2,000 Serve robots as Uber Eats drivers. If you are a big believer in A.I., this may be a new opportunity to take advantage of the growing market in a new way.

The group has taken a number of steps to enhance its service, including its Domino’s partnership, hands-free order tracking with Amazon Alexa and the launch of its group grocery orders. This has led to Uber’s Q2 adjusted EBITDA reaching an all-time high and revenue increasing 14%.

Just Eat Takeaway (JET)

Just Eat is the third stock on our list. The delivery firm operates in 20 countries, however the stock has had a torrid time over the past year. It is down almost 40% this year, although its discounted price may offer a opportunity as consumer confidence picks up.

Despite a fall in revenue and orders for H1, Just Eat reported Adjusted EBITDA increased to €143m from a loss of €134m in the prior year H1. This improvement showcases Just Eats focus on efficiency and cost saving initiatives during a period of market challenges.

Its new passion for profits is showing, with the group anticipating Adjusted EBITDA of €275m in 2023 and free cash flow before working capital to turn positive in mid-2024.

Are Food Delivery Stocks Worthwhile?

The food delivery market is still a relatively new market, but its growth, especially over the pandemic has been strong. The market meets the demands of several consumers and is unlikely to go away anytime soon.

Investors should be aware of the increased competition as the market develops. This growing competition may impact profits for certain players and for a market that already has many unprofitable firms.

The potential for the food delivery market is significant and some of the top players are trading at a discounted price, offering excellent investment opportunities. However, it is important to remain aware of the difficulties these stocks can face in both the short and long term.

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