Ocado Share Price Is Down

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Ocado Share Price Is Down

Ocado Share Price Is Down 90% In Last 5 Years

Ocado is a part of the FTSE 250, but it is a rare exception as the stock price is down by 90% in the last 5 years. So, what went wrong with Ocado stock, and can it still make a comeback?

Ocado is an expert in warehouse automation and is also a big name in online grocery. The company really thrived during the pandemic, but it eventually invested most of the cash flow into robotics technology.

Ocado Faces Multiple Headwinds

This move was well received, and the company's stock price moved higher by 741% from 2016 to 2021. But if we look at Ocado's current trading price, it seems most of the gains have vanished.

So, what went wrong with Ocado? It is a combination of higher rates, soaring energy costs, and struggling business customers. Also, the surge seen in online grocery shopping during the pandemic eventually normalized, and that also affected Ocado.

Also, there are reports that Kroger will shut down 3 of its Ocado CFCs, which has hurt investor confidence. But if we take a closer look, it is actually good news as it will solve the liquidity crisis in the short term.

The reports reveal that Ocado will be compensated by $350 million from Korger, and that will give some breathing space to the firm. Also, the management is highly confident that Ocado will have positive cash flow in 2026.

This will also make it easy for Ocado to approach new retailers and generate new revenue sources. But the bottom line is that Ocado still has a lot of troubles, and they are not going anywhere anytime soon.

So, it is still risky to buy the Ocado shares, given that the company is going through a lot. But it is definitely a stock worth adding to your watchlist, and you can consider buying it if the financial numbers start to improve.

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