Ocado (LON: OCDO) share price has been in a freefall after peaking at 2,910p in 2021. It has plunged to a low of 320p, as I have predictedseveral times. Its market cap has plummeted to more than £2.6 billion, down from over £13 billion.
Ocado woes continue
Ocado Group has collapsed as investors remained concerned about its business and the rising competition in its core industries.
Just early this month, the company was booted from the FTSE 100 index and was replaced by Darktrace, a firm that is being acquired by Thoma Bravo.
And on Thursday, a major Canadian client announced that its deal with Ocado was no longer exclusive. That means that it can now work out a deal with other warehouse technology companies like Symbotic. Sobey’s is the second-biggest grocer in Canada.
The announcement came a few months after Kroger, the biggest US supermarket company, shuttered three sites powered by Ocado.
Most importantly, Ocado has gone for months without reporting any new customer gain in its technology division. As a result, investors are concerned about its overall growth.
Meanwhile, its joint venture with Marks and Spencer is not doing well, a situation that the latter has talked about. In the most recent results, MKS said that its share of Ocado Retail loss stood at over £37.3 million, and increase from £29.5 million in the previous year.
The most recent results by Ocado predicted that its revenue for this year will be mid-hgh single digits while its EBITDA margin will be about 2.5%. This means that its growth will be lower than the 10.6% it generated in the last quarter.
It is unclear whether Ocado will turn a profit this year since things are moving from bad to worse. In 2023, its annual loss jumped to over £413 million, down from £393 million a year earlier.
Ocado share price forecast
Ocado’s stock price was in a tight range between April and June. In this period, the stock failed to move below the crucial support level at 337p. This situation changed on Thursday as the stock made a bearish breakout.
The stock plunged to a low of 281p, its lowest point since 2016. It has remained below the 50-day and 100-day moving averages. Meanwhile, the stock dropped below the key support at 342.5p, its lowest point in 2023.
The Relative Strength Index (RSI) and the MACD continued pointing downwards. Therefore, the stock will likely continue falling as sellers target the key support at 281p, its lowest point this week. A break below that level will open the possibility of crashing to 197p, down by over 40% from the current level.
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