Delivery Hero (ETR:DHER): A Tale of Turbulence and Turnaround-Is the Stock a Buy or a Warning Sign?

Delivery Hero (ETR:DHER) has been a rollercoaster for shareholders since its 2020 peak. The stock surged 98.43% that year, buoyed by pandemic-driven demand for food delivery services, according to a CNBC report, only to plummet by 57.38% in 2022 and 41.68% in 2023. By October 2025, the stock traded at €25.04, a 74.58% drop from its 2020 high of €98.52, according to Yahoo Finance. This dramatic underperformance has left investors questioning whether the stock is a discounted opportunity or a cautionary tale.

A History of Volatility and Financial Struggles

Delivery Hero's financials tell a story of mixed signals. While total revenue rose to €13.4 billion in 2024-a 9.7% increase from 2023-the company's net income remained negative at €560.5 million, albeit an improvement from the €882.4 million loss in 2023, as reported by CNBC. The net profit margin of -7.18% for the trailing twelve months underscores persistent profitability challenges, according to Yahoo Finance. Gross profit margins, at 27.08% of revenue, suggest operational efficiency, but this has not translated into shareholder value given the company's high burn rate.

The stock's collapse from 2022 to 2023 was fueled by a combination of operational and strategic missteps. In 2023, the company failed to provide key sales guidance in its earnings report, triggering a sharp selloff; the company later addressed performance in its Q2 and H1 2025 results. The following year, Delivery Hero's decision to divest its stake in Deliveroo and potentially sell parts of its Southeast Asian Foodpanda business to Grab led to a 26% share price drop. Compounding these issues, the company faced antitrust scrutiny, with the European Union threatening fines exceeding €400 million over alleged anti-competitive practices, according to a Nasdaq article.

Recent Optimism: A Glimmer of Recovery?

Despite these headwinds, 2025 has brought cautious optimism. The company reported an 11% year-over-year increase in Group Gross Merchandise Value (GMV) to €12.2 billion in Q2 2025, with Total Segment Revenue surging 27% to €3.7 billion (see Q2 and H1 2025 results). Delivery Hero has since raised its full-year 2025 guidance, projecting GMV growth of 8–10% and Total Segment Revenue growth of 22–24% (see Q2 and H1 2025 results). These figures reflect stronger-than-expected performance, particularly in Asia, where GMV growth improved to -2% on a like-for-like basis-closer to positive territory than previously feared (see Q2 and H1 2025 results).

Analysts have taken note. A valuation model from Yahoo Finance estimates a fair value of €34.07 per share, implying a 36% upside from the October 2025 price. Meanwhile, 20 analysts maintain an "OUTPERFORM" consensus rating, with an average target price of €58.91 (see Q2 and H1 2025 results). Major institutions like Bernstein, Barclays, and JP Morgan have reiterated "Buy" recommendations, citing the company's improved profitability and strategic focus on high-growth markets (see Q2 and H1 2025 results).

Risks That Loom Large

However, the path to recovery is fraught with risks. Regulatory pressures in Europe remain a critical concern. The EU's Platform Work Directive and Corporate Sustainability Due Diligence Directive (CSDDD) are reshaping labor laws, with Delivery Hero facing scrutiny over worker classification and algorithmic management practices, as noted by Yahoo Finance. Past legal battles in Spain and Italy over misclassifying delivery workers highlight the vulnerability of its business model, per Yahoo Finance.

Foreign exchange volatility also poses a threat. A stronger euro against the U.S. dollar and Korean won has pressured adjusted EBITDA and free cash flow projections, with the CFO acknowledging that FX headwinds alone derailed original 2025 targets, according to Reuters. For a company operating across 40+ markets, currency fluctuations could erode margins even as operational performance improves, Reuters noted.

A Calculated Bet: Opportunity or Overreach?

Delivery Hero's long-term prospects hinge on its ability to navigate these challenges while capitalizing on its strengths. The company's investments in robot- and drone-assisted deliveries, as well as its global technology platform, aim to enhance logistics efficiency and profitability (see Q2 and H1 2025 results). If successful, these innovations could differentiate Delivery Hero in a crowded market.

Yet, the stock's five-year decline of 75% and a 36% drop in the last year suggest that investors remain skeptical. While the current valuation appears undervalued relative to analyst estimates, the risks-regulatory, operational, and macroeconomic-are substantial. For risk-tolerant investors, the stock's depressed price and improving fundamentals may present a compelling entry point. For others, the unresolved challenges could signal a prolonged struggle.

Conclusion

Delivery Hero's journey from 2020 to 2025 is a case study in the volatility of high-growth tech stocks. The company has made strides in improving revenue and profitability, and its updated guidance reflects renewed confidence. However, the specter of regulatory fines, FX volatility, and past missteps cannot be ignored. Investors must weigh the potential for a rebound against the likelihood of continued turbulence. For those who believe in the company's long-term vision and its ability to adapt, Delivery Hero could offer a high-risk, high-reward opportunity. For the cautious, it remains a cautionary tale.