Ocado Share Price At Record Lows

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Ocado Share Price At Record Lows

Why Ocado Share Price Is At Record Lows?

Ocado Group (OCDO) is down by 94% from its all-time high, which clearly shows there's something wrong with it. In fact, some analysts now think the stock might even reach zero if the situation doesn't improve.

Back in 2020, Ocado Group (OCDO) share price reached 29, which was a pretty good level. But now, the share price is trading below the 5 resistance, which is an alarming situation for the investors.

Ocado Group Share Price At Record Lows

So, what is Ocado Group? It is a grocery logistics and tech company that joined the UK stock market in 2010. However, the Ocado Group share price reached a high of 2914p during the pandemic era.

But during 2020-2023, some analysts started to give warnings about Ocado Group shares being overvalued. As it turns out, those analysts were right as the stock price is now at record lows.

Ocado Group was once a 20 billion company, but now its market cap is only 1.6 billion. On top of that, Ocado Group has never paid a dividend in its history!

One of the biggest issues for Ocado Group is that a massive upfront investment is needed to add advanced robots to warehouses. These robots are then used to pack, pick, and move groceries. Also, the centers must operate at almost maximum capacity, which is yet another downside.

Overall, Ocado Group has a very solid technology, but it requires a massive upfront investment. Also, the business model of Ocado Group is still not profitable, which has made things tough for Ocado Group.

With all things considered, the safest option is to stay out of the Ocado Group stock for now. Of course, many will feel tempted to get into the stock as it is trading at such low levels.

But it is worth mentioning that buying Ocado Group stock at these levels carries a higher degree of risk. So, if the Ocado Group manages to become profitable, it would mean massive returns for those who bought the stock at the lows.

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