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Olo Soars 11% in 3 Months: Is it the Right Time to Buy the Stock?
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Olo Inc. (OLO - Free Report) shares have jumped 10.6% in the past three months, outpacing the Zacks Internet - Software Industry and the S&P 500 index’s return of 3.3% and 2.4%, respectively. The stock has also outperformed the Zacks Computer and Technology Sector, which has declined 3.6% over the same time frame.
This outperformance reflects investors’ optimism over Olo’s prospects following its back-to-back quarters of strong quarterly performance. Over the past four quarters, its top line has surpassed the Zacks Consensus Estimate while the bottom line has matched the same. In the second quarter of 2024, revenues and earnings marked significant year-over-year improvement.
During the last reported quarter, Olo added 1,000 net new locations, bringing the total to 82,000 locations. This reflects its ability to gain market share. In the second quarter, it reported that all of its segments, including Order, Pay and Engage, are experiencing positive momentum. All these have instilled investors’ confidence in Olo’s prospects, which led to the recent share price appreciation.
Comparing the last three months’ price performance with its competitors, OLO stock has outperformed Block (SQ - Free Report) , while underperformed PAR Technology (PAR - Free Report) and DoorDash (DASH - Free Report) .
While Block and PAR compete with OLO in the Restaurant Point of Sales solution market, DASH competes in the direct ordering solutions space. SQ, PAR and DASH have gained 6.4%, 28.9% and 20.3% in the last three months.
OLO Past Three Months Performance
Image Source: Zacks Investment Research
OLO Gains From Expanding Product Portfolio
In the past year, Olo has rapidly increased its capabilities through new product launches. The company has launched solutions like Loyalty for Borderless Accounts, Catering+ and Smart Cross-Sells.
Loyalty for Borderless Accounts is a feature that hotels and restaurant owners can leverage alongside their existing loyalty programs. This feature enables restaurant customers to earn rewards and use them later for subsequent transactions.
The Cross-Sells feature enables restaurants and hotels to drive guest engagement by offering personalized suggestions during the ordering and checkout process. This also increases the organization’s revenues by cross-selling the amenities.
OLO also introduced a Catering+ solution to enable its restaurant and hotel customers to take and deliver bulk orders. Moreover, OLO enhanced its Loyalty for Borderless Accounts by offering all of its customers this feature who use the Serve platform.
Based on the robust portfolio and several client wins, OLO expects 2024 revenue in between $279.5 million to $280.5. The Zacks Consensus Estimate for the revenue is pegged at $280 million suggesting a growth of 22.7% year over year.
Conclusion
Olo’s sustained focus on enhancing product capabilities and expanding active locations is likely to continue driving its financial performance. Moreover, the stock currently sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Per Zacks’ proprietary methodology, stocks with a combination of Zacks Rank #1 or 2 (Buy) and a Growth Score of A or B offer solid investment opportunities.
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Olo Soars 11% in 3 Months: Is it the Right Time to Buy the Stock?
Olo Inc. (OLO - Free Report) shares have jumped 10.6% in the past three months, outpacing the Zacks Internet - Software Industry and the S&P 500 index’s return of 3.3% and 2.4%, respectively. The stock has also outperformed the Zacks Computer and Technology Sector, which has declined 3.6% over the same time frame.
This outperformance reflects investors’ optimism over Olo’s prospects following its back-to-back quarters of strong quarterly performance. Over the past four quarters, its top line has surpassed the Zacks Consensus Estimate while the bottom line has matched the same. In the second quarter of 2024, revenues and earnings marked significant year-over-year improvement.
During the last reported quarter, Olo added 1,000 net new locations, bringing the total to 82,000 locations. This reflects its ability to gain market share. In the second quarter, it reported that all of its segments, including Order, Pay and Engage, are experiencing positive momentum. All these have instilled investors’ confidence in Olo’s prospects, which led to the recent share price appreciation.
Comparing the last three months’ price performance with its competitors, OLO stock has outperformed Block (SQ - Free Report) , while underperformed PAR Technology (PAR - Free Report) and DoorDash (DASH - Free Report) .
While Block and PAR compete with OLO in the Restaurant Point of Sales solution market, DASH competes in the direct ordering solutions space. SQ, PAR and DASH have gained 6.4%, 28.9% and 20.3% in the last three months.
OLO Past Three Months Performance
Image Source: Zacks Investment Research
OLO Gains From Expanding Product Portfolio
In the past year, Olo has rapidly increased its capabilities through new product launches. The company has launched solutions like Loyalty for Borderless Accounts, Catering+ and Smart Cross-Sells.
Loyalty for Borderless Accounts is a feature that hotels and restaurant owners can leverage alongside their existing loyalty programs. This feature enables restaurant customers to earn rewards and use them later for subsequent transactions.
The Cross-Sells feature enables restaurants and hotels to drive guest engagement by offering personalized suggestions during the ordering and checkout process. This also increases the organization’s revenues by cross-selling the amenities.
OLO also introduced a Catering+ solution to enable its restaurant and hotel customers to take and deliver bulk orders. Moreover, OLO enhanced its Loyalty for Borderless Accounts by offering all of its customers this feature who use the Serve platform.
Based on the robust portfolio and several client wins, OLO expects 2024 revenue in between $279.5 million to $280.5. The Zacks Consensus Estimate for the revenue is pegged at $280 million suggesting a growth of 22.7% year over year.
Conclusion
Olo’s sustained focus on enhancing product capabilities and expanding active locations is likely to continue driving its financial performance. Moreover, the stock currently sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Per Zacks’ proprietary methodology, stocks with a combination of Zacks Rank #1 or 2 (Buy) and a Growth Score of A or B offer solid investment opportunities.