The Ocado share price is in the spotlight on Tuesday after the company announced strong quarterly results. The stock ended the day at 1,985p, which was about 31% below the year-to-date high of 2,923p. It is also about 100% above the lowest level in 2020.
Ocado earnings. Ocado published relatively strong quarterly results on Tuesday. The company said that its revenue rose by 21.4% to 1.3 billion pounds. It recorded growth in all segments, including retail, UK solutions and logistics, and international solutions. The retail division’s revenue rose by 19.8% while its UK solutions and logistics rose by 13.1% to 357 million pounds. Ocado’s EBITDA came in at 61 million pounds while its loss before tax narrowed to more than 23 million pounds. In a statement, the company’s CEO said:
“The model is resilient – as the imminent relaunch of Andover as a state of the art robotic CFC shows – and well suited to an environment where customers will ask grocers to offer solutions to a full range of customer missions from same day delivery to next day; big basket to immediacy; delivery to home or kerbside pick-up.”
The Ocado share price is also reacting to news that the firm has entered into a partnership with Alcampo, a Spain-based retailer. It is a leading retailer with more than 180,000 employees and with operations in 13 countries. The firm had revenues of more than 4.8 billion euros in 2020. The company will use Ocado’s Solutions to power its logistics solutions. The deal will start with a fulfilment center to serve Madrid region in 2024. So, what next for the Ocado share price?
The daily chart shows that the OCDO share price has struggled lately. It has already declined by more than 30% from its highest point this year. It has also declined by more than 15% this year, underperforming the FTSE 100 index. Further, the stock has formed a descending channel that is shown in blue and is at the 50% Fibonacci retracement level.
Therefore, there is a possibility that the stock will keep falling as bears target the lower side of the channel at 1,818p. On the flip side, a move above the resistance at 2,090p will invalidate this prediction.
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