Just Eat Takeaway.com Share Price Forecast August 2021 – Time to Buy JET?

Shares of Anglo-Dutch online food delivery company Just Eat Takeaway.com (LSE: JET) have increased by more than 2%, trading around 6310p at the time of writing. The shares have gone into reverse after surging higher during the first lockdown as evident by its share prices falling by 30% in 12 months.

Just Eat Takeaway.com – Technical Analysis

According to the financial statement released by Just Eat Takeaway.com, the company’s current market cap is at £13.071 billion with total assets worth £9.269 billion. Revenue for 2020 was at £1.83 billion and a profit margin of -7.39% compared to revenue of £352.39 million in 2019.

Moving averages such as Exponential Moving Average (100)(6656), Simple Moving Average (100)(6671), Exponential Moving Average (200)(7044) and Simple Moving Average (200)(7269) are pointing towards a sell action. On the other hand, oscillators such as Relative Strength Index (14)(50), Stochastic %K (14, 3, 3)(31), Commodity Channel Index (20)(22),  Average Directional Index (14)(12) and Awesome Oscillator(−9) are pointing towards neutral.

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Recent Developments

According to the latest update released by the company, its losses have bottomed out, with management expecting Just Eat Takeaway.com to gradually become profitable. Sales for the company have totalled €2.6 billion, which is a 52%  increase from the first half of 2020.  The company enjoyed unrivalled success during the first 6 months of 2021, handling 135 million orders from the United Kingdom alone, which is roughly two orders for every person in the country.

In reality, however, these orders came from a smaller number of repeat customers, which account for 67% of their total customer base. Customers orders 3.2 times a month on average, which is an increase from 2.5 times one year ago. Delivery orders from Germany also increased by 110% while that in the United States grew by 27%. The company is facing increased competition in Germany as rival Delivery Hero has also entered the market, reigniting the fight for the biggest market share.

Should You Buy JET Shares?

The big risk regarding JET shares is that the surge was caused as a result of the lockdown periods in many western countries during the first half of 2021. With the economies of several countries slowly returning back to normal, there is fear among investors whether Just Eat Takeaway.com can maintain the same amount of momentum.

However, larger companies like Just Eat Takeaway.com which have been formed out of mergers are in a better position to become profitable due to their high customer density. Many of the company’s international operations have been consistently profitable on an underlying basis, despite the group making losses. This is evident by the increase of the company’s market share in the Netherlands, Germany and Canada.

The main loss-making components were the company’s U.K. and U.S. operations, both of which are an addition to the core company’s networks. With success in other western markets, there is no reason that the company cannot turn around its fortunes in the U.K. and U.S. markets as well. The lack of investment in the United Kingdom is currently being addressed by the management.

But despite the share price decline, JET is priced for growth. The shares are trading approximately three times the forecast values for 2021 but profits aren’t expected until 2023. The company’s large size and major market share will assist it in becoming a long-term winner in this sector. However, its current lack of profitability means that JET shares aren’t worth adding to your portfolio in the current market, but things can change sooner rather than expected.

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