Waitr Holdings Inc.

WTRH Details

Waitr Holdings Inc. (NASDAQ: WTRH) is a US-based online food ordering platform operator that provides delivery, carryout, and dine-in services. WTRH connects local restaurants and grocery stores to diners in underserved US markets through its Waitr, Bite Squad, and Delivery Dudes smartphone apps, providing a quick method to explore, order, and get amazing food and other products from local restaurants, national chains, and grocery stores. The company had over 25,000 eateries listed on its marketplace as of June 30, 2021, across over 900 cities

Acquisitions in the Fintech Sector: On August 26, 2021, WTRH closed the asset acquisitions of three merchant processing solutions companies, namely, ProMerchant, Flow Payments, and Cape Cod Merchant Services. These acquisitions are part of the company's strategy to diversify its revenue streams beyond third-party food delivery.

Q2FY21 Results: The company reported a decline of 18.74% in revenues to USD 49.17 million in Q2FY21 (ended June 30, 2021) compared to USD 60.51 million in Q2FY20, primarily due to decreased order volumes. Its net loss for Q2FY21 was USD 5.64 million vs. a net income of USD 10.65 million reported in Q2FY20. As of June 30, 2021, the company's cash and cash equivalents amounted to USD 60.55 million, with total debt of USD 86.68 million.

Key Risks: The business model of WTRH is based on discretionary spending patterns in the regions where its platforms operate, as well as in the overall economy. Economic downturns or other negative occurrences affecting the US and global economies could substantially influence its operating results.

Outlook: On June 03, 2021, WTRH embarked on a 12 – 18 month strategic rebranding initiative to modify its name and visual identity. This initiative reflects WTRH's long-term ambition for innovation, expansion into new industries, and the creation of a technology-forward platform.

Valuation Methodology: Price/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

WTRH Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: WTRH's share price has surged 64.03% in the past week and is currently close to the lower end of the 52-week range of USD 0.80 to USD 4.57. The stock is currently trading between its 50 and 200 DMA levels, and its RSI Index is at 69.45. We have valued the stock using the Price/Sales-based relative valuation methodology and arrived at a target price of USD 1.18. Considering the steep uptick in the stock price in a short time and declining top and bottom-line, we believe the business fundamentals are adequately reflected at the current trading levels. Hence, we recommend a "Sell" rating on the stock at the current price of USD 1.35, up 68.43% as of October 13, 2021, at 10:19 AM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.