What happened to Hellofresh?
Hellofresh (HFG) delivers meal-kits to its customers. It is based in Berlin, Germany and operates globally.
The HFG stock enjoyed a great rally during the pandemic as people stayed at home and needed healthy and easy-to-use meal kits. Take a look at the chart, it increased from 10 in 2019 to nearly 100 just within two years.
But the growth phantasies ended with the pandemic. Demand fell and aggressive expansion during the pandemic has proven to be overly optimistic. So, the stock tanked.
HFG is now trading at an EV/Sales ratio of 0.2x and an EV/EBIDTA of 4.3x. The P/E ratio is at 18.6 (E), which is not that cheap. Debt seems manageable and they have a lot of cash on hand.
Keep it on the watchlist. Earnings are due tomorrow. If management decides to downsize to bring profitability back up, it could be an interesting trade. Especially when people decide to cook at home due to rising prices for eating at restaurants.
***No investment advice, just sharing my investment observations. For educational purposes only!
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