Ocado Group PLC's (LSE:OCDO) full-year results are on the conveyor belt towards publication on the last day of February, with the share price down 10% over the past month.
Anyone who sold their shares in the online delivery group in recent weeks perhaps was shrewd enough to take notice of previous patterns, which some have suggested should lead investors to sell Ocado before results are released, especially with four profit warnings last year and another weak update for its UK joint venture with Marks and Spencer last month.
While noting that at least 3.5% of the FTSE 100-listed group's shares are currently being shorted by hedge funds, it should also be remembered that, as research has shown, basing investment decisions on past performance generally does not work.
The results will allow the company to talk again about its Solutions division, the part that holds the key to its status as a technology company and saw its shares more than double during the pandemic to highs near £30 apiece (then fall below £4 last October).
Ocado Solutions last supplied a big boost to the shares in November, when a contract was won with the retail arm of South Korea's Lotte Group.
Since then, there have been some decidedly sceptical broker notes.
JPMorgan said the Lotte deal was all good but the company needs to sign around a dozen more similar-sized deals to "justify" its multi-billion-pound valuation.
Shore Capital's longtime sceptic, Clive Black, said “it will be sometime indeed before the financial benefits, if any, of this partnership trickle into the Ocado Group revenue, EBITDA and, dare we state it, earnings line”.
And despite the group having said last June that £578mln of new funding will be enough to see it through to profitability, Black predicted that the Lotte deal may "probably brings forward the need for yet another round of fundraising".
More recently, RBC Capital agreed that additional financing will be needed in the mid-term. What's more they said cash flow forecasts from the company may be too ambitious, with a business model that offers “great technology, but at a great cost”.
The profit warnings over the last year arose due to customers trading down to cheaper brands and cutting basket size amid the cost-of-living squeeze.
For the year to November, analysts are forecasting revenues of £2.6bn versus £2.5 billion in 2021, along with a much larger pre-tax loss of £429mln compared to £177mln a year earlier, with the company's preferred measure of underlying loss (on an EBITDA basis) of £47mln against £61mln last time.