One of the best performing companies throughout the coronavirus crisis has been ASX meal kit delivery service Marley Spoon AG (ASX: MMM). Since mid-March, the Marley Spoon share price has skyrocketed an astronomical 978%, from just $0.23 on 17 March to $2.48 as at the time of writing. This is particularly impressive considering Marley Spoon shares spent most of 2019 trading well under 50 cents.
Marley Spoon is perfectly positioned to help populations get through COVID-19 lockdowns. With many restaurants closed, or at least accepting fewer bookings, and everyone spending more time at home, families are having to cook many more of their own meals. Throw in the fact that trips to the supermarket, particularly for those living in Melbourne's northern suburbs, feel more and more life-threatening, and you can see how the pandemic has created the perfect addressable market for Marley Spoon's services.
About Marley Spoon
Marley Spoon delivers pre-packaged meal kits to its customers once a week. Each box contains a number of recipes, as well as the pre-portioned ingredients required to cook them. The company promotes itself as a healthy food option that encourages people to develop their cooking skills, while cutting down dramatically on food waste.
In many ways, the company is really a grocery delivery service, but the Marley Spoon share price performance has outpaced that of the big supermarket chains like Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL).
Despite a partial recovery, the Woolworths share price is still trading below its pre-coronavirus levels. This is partially due to losses stemming from the company's hotels business as well as the significant remediation costs associated with historic payment shortfalls for salaried staff. The Coles share price has surged over 20% higher this year but hasn't seen anywhere near the same level of explosive growth as that of Marley Spoon.
Financial performance
Marley Spoon revenues for the March quarter were 42.8 million euros, an uplift of 46% over the same quarter in 2019. However, what was most notable from those results was that over half of the company's revenue was generated in just the last three weeks of the quarter alone, showing the incredible uptake in its services brought about by global lockdowns. If that momentum carried through into the second quarter, Marley Spoon is expected to announce positive operating EBITDA at group level in its June quarterly results – a significant milestone for the company.
Investors won't have to wait long to find out whether Marley Spoon has achieved that goal either, with June quarter results to be announced to the market on Wednesday.
Should you buy at today's Marley Spoon share price?
Marley Spoon isn't the only unlikely market darling to emerge out of the COVID-19 pandemic. Online furniture company Temple & Webster Group Ltd (ASX: TPW) has seen extraordinary growth in its share price, as has little-known hand and surface sanitiser manufacturer Zoono Group Ltd (ASX: ZNO).
However, even their gains pale in comparison to the skyrocketing returns of the Marley Spoon share price. Despite the excitement generated by its rapid growth, there is the obvious danger that it has already become wildly overvalued. And you don't want to be the one buying at the moment the bubble bursts.
Having said that, I think that spending so much time living under COVID-19 restrictions has brought about many changes in the way people shop. And many of these changes will persist well beyond coronavirus. The increased use of grocery delivery services like Marley Spoon could potentially be one of them.
So, even if you think the recent success of the Marley Spoon share price may only be short-term, I believe it has still proven itself an exciting enough company to warrant a place on your watchlist for 2020 and beyond.
