Shares in Just Eat PLC (LON:JE.) fell sharply in early trading on Tuesday after the online food delivery specialist saw order growth continue to tail off in 2016.
Just Eat shed almost £175mln from its market value only a few minutes after the opening bell.
The company saw like-for-like orders increase by 36% in 2016, which seems impressive, but it is on the decline for the past couple of years.
In 2014, the firm saw like-for-like order growth increase by 50%, which then slipped to 46% in the next year (2015).
Today’s figure continued that downward trend, worrying investors. Like-for-like order growth has now fallen every year since Just Eat listed.
Despite taking out one of its main UK rivals Hungry House in a deal which could be worth up to £240mln, the likes of Uber Eats and Deliveroo have quite literally eaten into Just Eat’s market share.
City broker Panmure was spot on earlier this morning when it noted: “Investors may be disappointed that there are no upgrades to full-year estimates and the shares could well be punished for this.”
Despite the initial frustration, Panmure analyst Michael Stewart was still upbeat on the stock generally.
“Just Eat will continue to take market share from the telephone, continue to make in-fill acquisitions that provide scale, enhance margins and boost earnings and continue to protect and extend its market leading position as leading aggregator models typically do.
“The management team is high quality and the acquisition of Hungry House, if approved, will provide a catalyst for the shares.”
Just Eat shares were down by more than 6% to 550p in early deals.