Just Eat Takeaway.com NV (LSE:JET, NASDAQ:GRUB) is experiencing a drop in sales post-Covid, but analysts believe the group are still on track to reach profitability in the coming years.
The food delivery service noted that gross transaction value (GTV) dropped 8% to €6.6bln in the first quarter of 2023.
Total orders also sunk to around 229mln, a 14% drop compared to the 264mln in the first quarter of 2022.
Despite being the quarter being compared against one of Just Eat’s strongest pandemic-driven quarters, Visible Alpha’s consensus had still expected orders and GTV to come in 6.8% and 4% higher, respectively.
Yet, both UBS and Jefferies still see Just Eat as a good investment despite the drop in sales, with both banks rating the stock a ‘buy’.
Analysts at Swiss bank UBS expect that the group could become debt free by 2027, predicting it will have €376mln in net cash by then.
It also believes that by 2026 the company will become profitable, estimating net earnings to reach €31mln before jumping to €193mln in 2027.
JET also launched a €150mln share buyback programme, representing around 4% of its equity.
“The buyback is driven by increased visibility on free cash flow generation and the shares will be used to meet obligations under its share-based compensation,” Jefferies said.
Just Eat boss, Jitse Groen, revealed in the update that the group was expecting to turn free cash flow positive by mid-2024.
Just Eat also raised its EBITDA forecast from €225mln to €275mln and announced plans to sell its Chicago-based subsidiary, Grubhub