Deliveroo share price: here’s my view 3 months after the IPO

first_img Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Deliveroo (LSE:ROO) listed on the London Stock Exchange to much fanfare via an initial public offering (IPO) at the end of March. Three months on from this IPO, I want to know what is happening with the Deliveroo share price and whether there are any developments that could tempt me to invest my cash and add Deliveroo to my portfolio. Let’s take a look.IPO disaster for DeliverooDeliveroo’s IPO was arguably the biggest on the LSE since Glencore in 2011. Advised and backed by some of the best banks and law firms, what could possibly go wrong? Well, pretty much everything.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Initially, Deliveroo floated on the LSE with a value of £7.6bn. The Deliveroo share price began at 390p per share but fell like a stone. At the end of the first day of trading, the share price was down 26%, to 287p per share. On paper, Deliveroo’s value was reduced to £5.2bn. By 7 April, the Deliveroo share price was still approximately 25% below its float price of 390p per share. This was after some favourable Q1 trading results too but more on that later. As I write, I can pick up Deliveroo for 258p per share. I would argue the Deliveroo share price has yet to recover from its disastrous start.Gig economy stocks are boomingDeliveroo is one of a number of stocks that has benefited from the gig economy boom. There are three things I like about Deliveroo which have alerted me to examining the Deliveroo share price. First, its rapid growth story is impressive. Developing into a multi-billion pound firm from humble beginnings in 2013 is admirable.Next, it is still founder-led. Will Shu founded the company and is still a major shareholder. Research indicates founder-led firms can be good investments. I believe Shu’s interests will align with those of shareholders, which can only benefit everyone involved.Finally, recent results were impressive. For Q1 2021, Deliveroo reported group orders of £71m which is an increase of more than 110% year-on-year. Gross transaction value (GTV) was reported at £1.65bn which is up approximately 130% year-on-year. It also reported its monthly active customer base had grown over 91% year-on-year to 7.1m active consumers on average during Q1. My verdict on the Deliveroo share priceWould I buy Deliveroo shares just now? The short answer is no. Deliveroo is generating substantial losses despite its growth. In 2020 it reported a loss of £224m. In 2019, it reported an operating loss of over £300m. As a rule of thumb, I am bearish on unprofitable companies for my portfolio, despite growth. As well as financial losses, Deliveroo faces stiff competition from the likes of Just Eat and Uber Eats in what is becoming a saturated market. Currently I cannot find a unique selling point for Deliveroo.Overall, I believe the Deliveroo share price is underwhelming as it was overpriced to begin with. Of course, firms can have a disastrous IPO and still flourish longer term. A prime example of this is Facebook. For that reason, I will keep an eye on developments. Deliveroo share price: here’s my view 3 months after the IPO Jabran Khan | Tuesday, 15th June, 2021 | More on: ROO Get the full details on this £5 stock now – while your report is free. Are you on the lookout for UK growth stocks?If so, get this FREE no-strings report now.While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.And the performance of this company really is stunning.In 2019, it returned £150million to shareholders through buybacks and dividends.We believe its financial position is about as solid as anything we’ve seen.Since 2016, annual revenues increased 31%In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259Operating cash flow is up 47%. (Even its operating margins are rising every year!)Quite simply, we believe it’s a fantastic Foolish growth pick.What’s more, it deserves your attention today.So please don’t wait another moment. Enter Your Email Address Simply click below to discover how you can take advantage of this. Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Image source: Getty Images. I wouldn’t buy Deliveroo shares but check out the report below for a top pick. Our 6 ‘Best Buys Now’ Shares FREE REPORT: Why this £5 stock could be set to surge I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. 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