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Olo (OLO)
NYSE:OLO
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Olo
(NYSE:OLO)
72Outperform
Positive Factors
Customer Satisfaction
Customers continue to be very happy with Olo’s product, capabilities, and customer support/success as evidenced by gross retention that has remained around 98%.
Product Development
Olo's rapid platform development and speedy product evolution set it apart from competitors.
Negative Factors
Growth Challenges
OLO's location growth trajectory will face challenges, especially as it looks to the 'emerging enterprise' space for new customers.
Revenue Growth
The majority of revenue growth has been driven from Olo Pay, which has a lower gross margin profile compared to OLO's core software.
Olo (OLO) vs. S&P 500 (SPY)
Market Cap
$1.09B
Dividend YieldN/A
Average Volume (3M)1.43M
Price to Earnings (P/E)―
Beta (1Y)1.19
Revenue Growth24.81%
EPS Growth98.55%
CountryUS
Employees617
SectorTechnology
Sector Strength54
IndustrySoftware - Application
Share Statistics
EPS (TTM)>-0.01
Shares Outstanding115,708,990
10 Day Avg. Volume1,288,844
30 Day Avg. Volume1,431,788
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.75
Price to Cash Flow (P/CF)28.70
P/FCF Ratio39.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$8.63Price Target Upside32.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Olo Business Overview & Revenue Model
Company DescriptionOlo (OLO) is a leading provider of digital ordering and delivery solutions for the restaurant industry. The company offers a comprehensive platform that enables restaurants to manage their online and mobile ordering, delivery, and customer engagement. Olo's services are designed to streamline operations, enhance customer experiences, and drive sales growth for restaurant brands of all sizes.
How the Company Makes MoneyOlo primarily makes money through subscription fees and transaction fees. Restaurants pay subscription fees to use Olo's software platform, which provides tools for online ordering, delivery management, and customer engagement. In addition to subscription revenue, Olo earns transaction fees each time a customer places an order through its platform. These transaction fees are typically a percentage of the order value. The company's revenue model is further supported by significant partnerships with restaurant chains and third-party delivery services, which expand its reach and drive more transactions through its platform.
Olo Financial Statement Overview
Summary
Olo shows impressive growth and financial stability with strong revenue and cash flow improvements. While profitability remains a challenge, the company's healthy balance sheet provides a solid foundation for continued expansion. Strategic focus on sustaining revenue growth and improving margins will be critical for future success.Income Statement
Olo has demonstrated strong revenue growth with a 24.8% increase from 2023 to 2024, building on consistent annual growth since 2019. The company improved its gross profit margin to 54.9% in 2024, indicating effective cost management. However, a continued negative EBIT and net profit margin reflect ongoing profitability challenges, typical for a growing software company.82
Very Positive
Balance Sheet
Olo's balance sheet shows a strong equity position with an equity ratio of 90.5% in 2024, indicating financial stability. The debt-to-equity ratio is low at 0.02, suggesting minimal leverage. Despite negative net income, the ROE is less relevant due to the company's growth phase. The strong cash position enhances financial resilience.77
Positive
Cash Flow
The cash flow statement is robust, with a significant turnaround in free cash flow from negative $19.67 million in 2023 to positive $38.81 million in 2024. The operating cash flow to net income ratio signals healthy operational efficiency, although the free cash flow to net income ratio is distorted by negative net income.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 284.94M | 228.29M | 185.40M | 149.37M | 98.42M | Gross Profit |
| 156.42M | 138.97M | 127.89M | 118.54M | 79.76M | EBIT |
| -19.14M | -75.08M | -51.66M | -27.98M | 16.09M | EBITDA |
| 14.61M | -47.56M | -41.05M | -45.21M | 4.08M | Net Income Common Stockholders |
| -897.00K | -58.29M | -45.97M | -42.27M | 3.06M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 360.74M | 362.55M | 448.77M | 514.45M | 75.76M | Total Assets |
| 754.78M | 742.82M | 775.56M | 755.88M | 134.42M | Total Debt |
| 13.98M | 18.86M | 20.05M | 0.00 | 0.00 | Net Debt |
| -272.77M | -259.36M | -330.03M | -514.45M | -75.76M | Total Liabilities |
| 71.55M | 91.35M | 77.95M | 54.13M | 186.91M | Stockholders Equity |
| 683.22M | 651.47M | 697.62M | 701.75M | -52.48M |
| Cash Flow | Free Cash Flow | |||
| 38.80M | -19.67M | -6.65M | 14.41M | 19.50M | Operating Cash Flow |
| 39.69M | -6.57M | 2.34M | 16.25M | 20.77M | Investing Cash Flow |
| -16.87M | -19.49M | -158.48M | -77.07M | -1.27M | Financing Cash Flow |
| -14.28M | -45.80M | -8.23M | 499.51M | 45.33M |
Olo Technical Analysis
Neutral
6.52
Price Trends
6.93
Negative
6.98
Negative
5.92
Positive
Market Momentum
-0.14
Negative
45.73
Neutral
85.11
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OLO, the sentiment is Neutral. The current price of 6.52 is above the 20-day moving average (MA) of 6.42, below the 50-day MA of 6.93, and above the 200-day MA of 5.92, indicating a neutral trend. The MACD of -0.14 indicates Negative momentum. The RSI at 45.73 is Neutral, neither overbought nor oversold. The STOCH value of 85.11 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for OLO.
Olo Risk Analysis
Olo disclosed 65 risk factors in its most recent earnings report. Olo reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Olo Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $2.44B | 20.06 | 17.79% | ― | 5.61% | 37.61% | |
74 Outperform | $157.95B | 16.18 | 60.08% | ― | 17.96% | 410.17% | |
73 Outperform | $20.90B | ― | 1.46% | ― | 28.33% | ― | |
72 Outperform | $1.09B | ― | -0.13% | ― | 24.81% | 98.55% | |
72 Outperform | $13.59B | 35.96 | 131.11% | ― | 4.11% | 3328.10% | |
72 Outperform | $81.02B | 727.81 | 1.68% | ― | 24.17% | ― | |
58 Neutral | $21.97B | 10.63 | -18.43% | 2.40% | 4.67% | -24.47% |
* Technology Sector Average
Performance Comparison
OLO
Olo
6.43
0.94
17.12%
YELP
Yelp
38.37
-1.03
-2.61%
UBER
Uber Technologies
74.18
-2.81
-3.65%
CHWY
Chewy
33.25
17.34
108.99%
DASH
DoorDash
192.87
55.15
40.05%
TOST
Toast Inc
35.97
11.05
44.34%
Olo Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -0.91% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
Olo demonstrated strong growth and expansion in 2024, with significant increases in gross merchandise volume and payment volume, successful strategic partnerships, and high customer retention rates. However, expected margin compression due to the scaling of Olo Pay is a concern. Overall, the positive achievements outweigh the lowlights.Highlights
Record Gross Merchandise Volume
Olo powered $29 billion in gross merchandise volume in 2024, making it the second largest brand in North America by sales volume.
Doubling Gross Payment Volume
Olo more than doubled its gross payment volume to $2.8 billion in 2024 from $1 billion in 2023.
Expansion of Borderless Accounts
Olo increased its borderless accounts from 2 million to nearly 15 million year-over-year.
Strong Financial Performance
Q4 revenue was $76.1 million, up 21% year-over-year, exceeding revenue and non-GAAP operating income guidance ranges.
High Customer Retention
Net revenue retention was 115%, with a gross revenue retention rate above 98% and ARPU growth of 12% year-over-year.
Strategic Partnerships
Announced a partnership with FreedomPay to enhance Olo Pay card-present functionality, accelerating time to market.
Successful Product Innovations
Released 13 product enhancements, including AI-powered menu recommendations and deeper analytics in Engage.
Lowlights
Operating Margin Compression
Gross margins are expected to compress by approximately 250 basis points in 2025 due to scaling Olo Pay revenue.
Company Guidance
In the Olo Fourth Quarter 2024 Earnings Conference Call, the company outlined its strong performance for the year and provided guidance for 2025. Olo reported a total revenue of $76.1 million for Q4, up 21% year-over-year, and a full-year 2024 revenue of $284.9 million, also marking a 25% increase. The company achieved $29 billion in gross merchandise volume and more than doubled its gross payment volume to $2.8 billion. Olo ended the year with approximately 86,000 active locations, adding around 6,000 net new locations. The net revenue retention rate was 115%, with a gross revenue retention rate above 98%. For 2025, Olo expects revenue between $333 million and $336 million, with non-GAAP operating income ranging from $45.5 million to $47 million. The guidance reflects confidence in accelerating gross profit growth and driving operating leverage, partly fueled by the integration of Olo Pay card-present functionality through a new partnership with FreedomPay, which is anticipated to be available by mid-year 2025.Olo Corporate Events
Executive/Board Changes
Olo Announces Departure of Chief Revenue Officer
Neutral
Jan 21, 2025
On November 1, 2024, Olo Inc. and its Chief Revenue Officer, Mr. Diego Panama, agreed on his departure from the company effective December 31, 2024. Mr. Panama will provide advisory services until March 31, 2025, for which he will receive monthly fees, a prorated bonus, and other benefits. His stock awards will continue to vest through this advisory period, and he will receive severance payments starting April 1, 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.