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Just Eat Takeaway Aims for Reset Button as Shares Trail Rivals

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(Bloomberg) -- After watching its share price plunge and investor pressure ratchet up over the past year, Europe’s Just Eat Takeaway.com NV needs to address concerns over its strategy at an investor day on Oct. 21.

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The Amsterdam-based business was removed from the FTSE 100 benchmark stock index last month, its share price trails rivals, and prominent shareholders have warned the company is ripe for a takeover.

Thursday’s capital markets day is intended for executives to lay out the firm’s strategy, including updates on U.S. market positioning following the completion of its Grubhub acquisition in June. It’s a key moment for Just Eat’s boss Jitse Groen after struggling to win over markets in recent months.

Read more: Investors Want to Know How Just Eat Will Deliver for Them

“While we realize it may be difficult to provide a clear profitability target, its trajectory in the mid-term is an important question for investors,” UBS Group AG analyst Sreedhar Mahamkali wrote in a note Monday. “Any detailed discussion on how to drive efficiencies from the much greater scale in the logistics would help.”

The precursor to Just Eat Takeaway was founded 21 years ago in the Netherlands as a website to facilitate online takeout orders, matching customers to restaurants while the eateries delivered themselves.

Since then, competitors such as Deliveroo Plc and DoorDash Inc. emerged to offer a network of riders that handle delivery themselves. They’ve also pushed beyond couriering restaurant meals, with many major firms and startups now eyeing grocery delivery.

That has proved a challenge for Groen, who previously insisted on the unprofitability of logistics networks and grocery delivery before expanding in both areas this year.

“The roll-out of grocery might be too slow and cautious for investors,” Clement Genelot, an analyst at Bryan Garnier & Co. Ltd., wrote in a note last week. “Valuation has never been so low on company-specific concerns and on wider e-commerce investor perception issues.”

The company also faces a stiff test in the U.S. market, which it entered with a $7.3 billion acquisition for Grubhub that closed in June. New regulatory efforts have hampered the business along with strong competition from DoorDash and Uber Technologies Inc.’s Uber Eats.

Just Eat has indicated it’s planning a U.S. strategy focused on Grubhub’s existing strongholds. Yet it will have to do so without company founder Matt Maloney, who’s departing Just Eat in December.

“We need further information from management on the strategy for the U.S. to become comfortable with their position there,” Bernstein Autonomous LLP analyst William Woods wrote in a note last week.

In the third quarter, Just Eat reported orders rose 25% year-on-year, a slowdown from 37% in the previous quarter. The U.S. lagged with just 3% growth.

“The balance of probability suggests that the U.S. is now non-core and will be put into strategic review,” according to Jefferies Group LLC analyst Giles Thorne.

Meanwhile, investors are increasing their own positioning. Cat Rock Capital Management, which has called the company undervalued, boosted its stake to about 6% this month. Cat Rock reported in a filing that it has been in correspondence with Just Eat’s management board.

Thursday’s investor day is “management’s opportunity to address some of the communications challenges that were raised by Cat Rock,” according to Bernstein’s Woods.

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