Ocado has a TipRanks Smart Score of ‘1 Underperform’ and is rated as a ‘sell’ with 1 ‘buy’, 0 ‘hold’, and 2 ‘sell’ recommendations (as of 16 July 2025).
Revenue outlook across business segments
For fiscal year (FY) 2025, analysts expect Ocado Group to generate total group revenue in the £3.38 billion range. The second quarter (Q2) is likely to align with this trend, driven by the retail segment’s steady momentum.
Measured growth in technology solutions continues to support overall revenue performance. The company’s diversified business model provides stability across different market conditions and customer segments.
The retail partnership with Marks & Spencer (M&S) has proven successful, with customers responding positively to the enhanced product range and service quality improvements implemented throughout the collaboration.
Segment performance analysis and growth drivers
The logistics segment should deliver mid- to high-single-digit revenue increases, compounded by margin pressure from higher operating costs. This segment continues to benefit from increased demand for automated fulfilment solutions.
Technology solutions will be under the spotlight, particularly since FY 2025 growth guidance has been trimmed to around 10%, down from 18.9% in the prior year. Investors will look closely at commentary on the timing of the next few fulfilment centre launches.
North American expansion remains a key focus area, including Kroger sites where implementation remains gradual. The pace of international rollouts directly impacts the company’s long-term growth trajectory and market penetration strategies.
Shares in technology-focused retailers like Ocado sometimes reflect investor sentiment about automation trends and digital transformation in retail sectors globally.
Profitability metrics and cash flow progression
Analyst consensus forecasts robust FY 2025 earnings before interest, taxes, depreciation, and amortisation (EBITDA) around £212 million. Markets will scrutinise signs of progression towards Ocado’s target of free cash flow positivity by 2026.
Cost reduction initiatives, including approximately 500 research and development (R&D) job cuts, demonstrate management’s commitment to operational efficiency. These measures should contribute to improved margin performance across the business.
Any incremental margin improvement within tech or logistics would signal meaningful progress towards profitability targets. The company’s technology platform investments are beginning to show returns through improved operational efficiency.
Free cash flow generation remains the ultimate measure of business success. Investors are particularly focused on the realistic pathway to achieving positive free cash flow by 2026 as previously guided.
Market sentiment and technical analysis
Despite improving sentiment by some analysts, JPMorgan recently upgraded Ocado to overweight, critical execution risks remain around technology implementation and international expansion. The company must deliver on ambitious growth targets while managing operational complexities.
The Ocado share price remains in a long- to medium-term downtrend and is seen sliding towards its major 226.1p to 222.1p support zone, which contains the March and June lows.