Just Eat Reports In-Line 2021 GTV Growth; Losses Expected to Be Lower; Top Pick in Space
Just Eat Takeaway released its fourth-quarter update, which included orders and gross transaction value up 14% and 17%, respectively. Although order growth was somewhat lighter than expected at the group level (up 40% excluding Grubhub versus 45% guidance and 43% in our model), gross transaction value of EUR 28.2 billion was within the guided range of EUR 28 billion-30 billion and slightly lower than the EUR 28.5 billion we forecast. Excluding the U.S. business, marketplace orders (which restaurants deliver themselves and are highly profitable) were up 8% (notably up 19% in Germany and 11% in the Netherlands) in the fourth quarter and 20% for the full year (versus 22% for the year in our model), while delivery orders continue to drive growth for the group (up 37% and 97% excluding Grubhub and 32% and 69% for the group in the fourth quarter and full year, respectively). The company expects adjusted EBITDA margin to be at the midpoint of the guided range (negative 1.25% of GTV or negative EUR 352 million versus negative EUR 379 million in our model), which is a positive surprise. Management reiterated guidance of midteens GTV growth for the group in fiscal 2022 (versus 15% in our model), and fiscal 2022 adjusted EBITDA margin of negative 0.6%-0.8% of GTV (versus negative 0.8% in our model).
We don't anticipate significantly changing our fair value estimate for Just Eat Takeaway, and we maintain our narrow moat rating. The shares trade deep in 5-star territory, presenting a material opportunity with a strong margin of safety for patient investors.
Equity Analyst Ioannis Pontikis
Ioannis Pontikis, CFA
Equity Analyst
Analyst Note | Ioannis Pontikis, CFA | Jan 12, 2022