Deliveroo PLC (LSE:ROO) earnings beat City forecasts but analysts suggested the guidance delivered by management was disappointing, like a cold chip supper.
Underlying earnings (EBITDA) of £85 million was a positive swing from a loss of £45 million a year earlier, with the meal delivery company's outlook pointing to further growth to £110-130 million in 2024 and cash flow becoming positive.
Orders, which had been pre-announced, grew 3% in value to £7.6 billion due to price inflation.
Shore Capital analyst Bradley Hughes says results and guidance "appears in-line to slightly softer" versus consensus expectations, with gross transaction value growth guidance "not particularly supportive of the meaningful market share gains required, in our view, to reach #1 status in key markets".
The lack of additional share buybacks was also noted by Hughes, who reiterated a 'sell' rating.
UBS called the guidance "small soft", with ROO being the "last of the euro eFood players" to guide for 2024.
The 5-9% gross merchandise value (GMV) guidance at the mid-point of 7% looks "slightly soft" compared to the analyst consensus of 8%, but is stronger than peers, with Just Eat looking for 2-6%.
Adjusted EBITDA guidance at the mid-point of £120 million is also "slightly soft" with analysts looking for nearer £128 million, with UBS saying "whilst we see it as likely conservative we expect the market to see it as a little disappointing".
Positive free cashflow "whilst expected is clearly helpful" and with ROO raising EBITDA guidance twice last year and having held or taken market share in all key markets in 2023 this "is worth flagging again to investors".
However, UBS said "we think some could be disappointed about a lack of further cash returns at this stage.
"Despite this looking slightly disappointing we do see guidance as likely somewhat conservative. We also believe further cash returns could well come, believing the cash return story remains intact."