The Marley Spoon (ASX:MMM) share price is down 29% in a month

The Marley Spoon AG (ASX:MMM) share price is down 29% from its 52-week high. Is this a buying opportunity for investors?
The post The Marley Spoon (ASX:MMM) share price is down 29% in a month appeared first on Motley Fool Australia. –

Young male in chinos and light blue shirt falling suspended in mid-air on a grey background

The Marley Spoon AG (ASX: MMM) share price is out of form on Monday and is sinking lower.

In afternoon trade the subscription-based meal kit company’s shares are down 6% to $2.71.

This latest decline means the Marley Spoon share price is now down almost 29% from the 52-week high it reached just under a month ago.

Why is the Marley Spoon share price down 29% in a month?

Investors have been selling the company’s shares since the release of its half year results at the end of last month.

Although Marley Spoon delivered a very strong result, investors appear to have been expecting even more from the company. Especially given its incredible share price increase since the start of the year.

Year to date the Marley Spoon share price is still up 868% even after its sizeable pullback over the last few weeks.

Why is Marley Spoon on fire in 2020?

The catalyst for this incredible rise has been the strong demand the company has been experiencing because of the pandemic.

Lockdowns and social distancing initiatives have led to more and more consumers skipping restaurants and cooking at home. For the same reason, Breville Group Ltd (ASX: BRG) has reported very strong sales of its kitchen appliances this year.

In the first half of FY 2020, Marley Spoon reported an 89% increase in revenue to 116.2 million euros. Almost two-thirds of this revenue was generated in the second quarter at the height of the pandemic.

This was driven by a 104% increase in active customers to 350,000, a 5% lift in orders per customer to 4.4, and a 7% rise in average order value.

But perhaps best of all, this was achieved at a significantly lower customer acquisition cost. This led to Marley Spoon becoming operating cash flow positive by the end of the half.

In light of this strong form and continued solid demand in the third quarter, management upgraded its revenue growth guidance for FY 2020 to between 80% and 100%.

Is it too late to invest?

I think Marley Spoon is an exciting company and worth keeping a close eye on. But for now, I would suggest investors keep their powder dry and wait to see how it performs when the crisis passes.

At that point, I think it will be easier to judge whether its current valuation is appropriate or excessive. 

These stocks could rocket in a Post-COVID world (FREE STOCK REPORT)

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post The Marley Spoon (ASX:MMM) share price is down 29% in a month appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!