Just Eat’s (JE) shareholders may have experienced effects of indigestion when the stock plunged to its 52 week low of 319.60 GBX two weeks ago. Though the stock has clawed back approximately 10 percent in the past week, it is still down by close to 20 percent for the year. 

So should investors wait for the next course? After all, Index Ventures, Just Eat’s second largest shareholder reduced its 12 percent stake in the company to 8.3 percent and has also invested in Deliveroo, an online rival takeaway service in the UK. Furthermore, both Amazon (NASDAQ: AMZN) and Uber have already started food delivery in a number of US cities and thus are a threat to Just Eat’s market share.

These concerns, though valid, have unduly pummeled Just Eat shares to bargain levels. Though Deliveroo is expanding rapidly, it is largely focused on a niche market of “premium” restaurants where it employs its own network of drivers and cyclists. Deliveroo charges customers £2.50 flat fee and an unspecified commission. Just Eat, on the other hand, is an online marketplace that connects customers and restaurants that already equipped to do takeaway service thus reducing infrastructure costs and allowing for faster expansion. 

Despite the increased threat of competition, Just Eat increased its commission from 11 percent to 12 percent in 2014 and has the potential to increase it further as takeaway becomes more popular. The company’s revenues are derived from commissions, card/admin fees, one-time sign up fees as well as top placement fees on the platform. As credit card and online payments mode such as Word Pay increase, Just Eat’s could further pocket fees. 

Furthermore, much of Just Eat’s future potential lies in its overseas expansion. Earlier this month, Just Eat acquired four online takeaway food businesses in Spain, Italy, Brazil and Mexico. The takeaway delivery market in these four countries is worth over £8 billion and is reported to add an expected £5 million to 2017 EBITDA. With its recognizable brand name and low infrastructure costs, Just Eat has the potential returns to satisfy the portfolio of patient investors.

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