Olo Inc. OLO has experienced impressive stock performance, with its shares surging more than 86.7% in the trailing six months.
OLO has not only outperformed the broader Zacks Computer & Technology sector and the Zacks Internet - Software Industry but also its competitors, such as PAR Technology PAR, Toast TOST and Block SQ.
Over the same timeframe, shares of PAR Technology, Toast and Block have risen 59.1%, 46.9%, and 42.3%, respectively. Meanwhile, the sector and industry have returned 2.7% and 12.6%, respectively.
Olo’s positive share price movement has been driven by its strong revenue growth, increasing active locations and product innovations that align with the restaurant industry's ongoing digital transformation. By focusing on enhancing digital ordering and delivery solutions, Olo has outperformed the broader market and its industry peers.
Olo Inc. Price and Consensus
Olo Inc. price-consensus-chart | Olo Inc. Quote
In the third quarter of 2024, total revenues increased 24% year over year to $71.9 million, with platform revenues rising 24% to $71 million.
Olo’s vast enterprise customer base and scalable SaaS model offer significant revenue growth opportunities. The company’s success will depend on its ability to retain existing customers and attract new ones, ensuring continued expansion and profitability.
Expanding Locations Aid OLO’s Prospects
Olo has grown its active locations to about 85,000, marking a 10% year-over-year increase and exceeding its full-year target early. OLO added around 3,000 net new locations sequentially, and its customer base now includes more than 700 restaurant brands, underscoring its strong market presence and growth.
Its average revenue per unit (ARPU) grew 15% year over year to $850, reflecting improved revenue generation from each location and indicating strong monetization of its customer base.
Olo's dollar-based net revenue retention was above 120% for the fourth straight quarter, highlighting strong customer retention and continued revenue growth from existing clients, which is a positive indicator of long-term business stability.
Gross merchandise volume (GMV) surpassed $26 billion for the year ended Dec. 31, 2023, while Gross payment volume (GPV) reached $1 billion in the same period. These key metrics help management assess demand for Olo's products, reflecting strong market adoption and underscoring the company's growing influence in the digital transformation of the restaurant industry.
Strong Portfolio & Partner Base Aids OLO’s Prospects
Olo’s open SaaS platform is specifically designed to meet the unique needs of restaurants, aligning with industry goals. In collaboration with leading restaurant brands across the United States, the platform is the only independent open SaaS solution that enables modern hospitality through its three core product suites — Order, Pay and Engage.
The company showcased several product innovations in 2024, including the introduction of card-present payment processing for Olo Pay on Qu point-of-sale systems.
OLO has recently developed the latest features within Catering+ to help operators manage complex business accounts. Additionally, the company has enhanced its Borderless passwordless guest checkout solution by integrating brand loyalty program sign-ins.
Olo has strengthened its partnership with ezCater to introduce an integration that simplifies catering menu management for restaurants. This integration will automate menu updates across both tech platforms, saving restaurants valuable time by reducing the need for manual updates.
In the emerging enterprise segment, OLO achieved significant growth with multi-suite deployments. Notable additions include Papa Gino's and Pizza Inn, which implemented Ordering, Dispatch, Rails and Olo Pay card-not-present solutions.
OLO’s Estimate Revision Shows Upward Trend
For the fourth quarter of 2024, Olo expects net revenues between $72.5 million and $73 million. Revenues for 2024 are anticipated to be $281.4-$281.9 million.
The consensus estimate for fourth-quarter 2024 revenues is pegged at $72.87 million, indicating a year-over-year decline of 15.67%.
The consensus mark for the fourth-quarter 2024 bottom line is pegged at 7 cents per share,
up by a penny over the past 60 days. This indicates a 40% increase from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for 2024 revenues is pegged at $281.71 million, indicating year-over-year growth of 23.40%.
The consensus mark for earnings is pegged at 23 cents per share, up by a couple of cents over the past 60 days. The estimate indicates year-over-year growth of 53.33%.
Olo’s Zacks Rank
OLO currently sports a Zacks Rank #1 (Strong Buy), which implies that investors should start accumulating the stock right now. You can see the complete list of today’s Zacks #1 Rank stocks here.
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