Deliveroo share price has a 33% upside after soaring by 60% YTD

Deliveroo (LON: ROO) share price continued soaring this week as the company’s recovery continued. ROO stock price surged to a high of 147.30p, the highest point since February 2022. It has soared by over 104% from the lowest point in 2022. Also, it has jumped by over 60% this year while the FTSE 100 index has retreated by 2%.

Deliveroo is doing well

Deliveroo, the giant British food delivery company, is doing well as business conditions in the UK improve. Last week, the company won an important case in London when the Supreme Court ruled that it cannot recognize its riders as workers.

That was an important move for both Deliveroo and other companies in the gig economy because of its implications. Recognizing freelancers as workers would change how these companies operate. The ruling said:

The other positive development for Deliveroo is that UK inflation is falling. The most recent data showed that the headline Consumer Price Index (CPI) dropped from over 6% in September to 4.7% in October.

Deliveroo does well when inflation is moderated since it leads to more orders by consumers. It also reduces the overall operation costs for both the company and its riders.

The most recent results showed that Deliveroo’s Gross Transaction Volume (GTV) rose by 3% in the third quarter to £1.69 billion. The number of orders dropped slightly to 69.7 million while its revenue rose slightly to £487 million. Also, the average number of customers has been falling after peaking at 7.4 million in Q4’22.

Deliveroo share price continued rising after the company updated its medium-term GTV on its capital markets day. It expects that its GTV growth target will be mid-teens percentage growth per year. It also aims to get its EBITDA margin to 4% by 2026.

Deliveroo share price analysis

ROO chart by TradingView

Turning to the ROO stock price has been in a strong uptrend in the past few months. The shares have rallied from last year’s low of 73.5p in 2022 to over 147.7p. It has moved to the 23.6% Fibonacci Retracement level.

The shares have moved above the 50-day and 100-day Exponential Moving Averages (EMA). Also, the Relative Strength Index (RSI) is approaching the overbought point. Also, it has formed an ascending channel that is shown in blue. 

Therefore, the outlook for the stock is bullish, with the next point to watch being at 197.7p, the 38.2% Fibonacci Retracement point. This price is about 33% from the current level.