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After I take a look at this, the phrase “demise with a thousand cuts” involves thoughts. ocado (LSE:OCDO) inventory worth. It is down 91% over the previous 5 years, with 29% of that occurring up to now yr. New information introduced in February is inflicting new complications for buyers. The query is: What does it take to drive inventory costs up?
latest points
The most recent subject to shock some buyers this month (February 2026) is the information that Ocado will minimize round 1,000 jobs globally. In some methods, this should not shock individuals. The corporate has been reducing jobs over the previous yr in an effort to cut back general prices. Nevertheless, this doesn’t bode nicely for buyers forward of full-year outcomes due later this month. Reasonably, it signifies that the corporate wants to chop extra aggressively to get its funds underneath management.
Taking a step again, one of many core points that has at all times deterred me from investing on this enterprise (regardless of how low cost the inventory seems) is the dearth of profitability. The corporate solely makes a loss yearly. Though it generates billions of {dollars} in income, it nonetheless loses cash. There comes a time when buyers search for income, not simply future progress tales.
Lastly, on the finish of final yr, this information got here out. hook [Ocado’s largest international partner]had closed three automated warehouses. This has price round £37m in recurring income and solid doubt on Ocado’s future growth within the US.
rally catalyst
Logically talking, except Ocado goes bankrupt, its share worth can’t fall eternally. In essence, an organization has worth. However one thing has to occur for individuals to imagine this worth will improve.
One set off may very well be a contract with a brand new international accomplice. These are important offers that not solely considerably enhance revenues over the long run, but in addition present credibility by suggesting that the enterprise mannequin and know-how platform will work.
One other issue stands out as the continued decline in inflation, which can be contributing to improved margins within the meals sector. Knowledge launched earlier this month confirmed that costs rose 4% in January. This was down from 4.3% in December and the bottom degree since April 2025. If this development continues, Ocado may transfer nearer to posting a revenue, even when gross sales stay the identical.
It is onerous to be optimistic
However even when there are constructive indicators, I do not see any purpose to purchase the inventory proper now. Simply because a inventory has fallen considerably does not imply it is undoubtedly undervalued. Quite the opposite, there’s a robust argument that it’s of appreciable worth given the problems concerned.
If some occasion triggers a rally, I am going to consider it and see if it modifications the outlook, however till then I am going to maintain off.