Up 900% this year, can the Marley Spoon (ASX:MMM) share price continue to climb?

The Marley Spoon share price has been rocketing higher this year but what lies ahead in 2021 and beyond? Here, we take a closer look.

| More on:
marley spoon share price growing represented by three wooden spoons along side each other

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Marley Spoon AG (ASX: MMM) shares have been surging higher this year. The Marley Spoon share price has rocketed more than 900% higher since the start of the year to $2.84 per share.

Incredibly, Marley Spoon's market capitalisation has jumped from $58.7 million to around $540 million at the time of writing.

That's great for existing shareholders, but what about those of us that aren't already in? Does the Marley Spoon share price have further to run?

Why the Marley Spoon share price has surged

The big one here is the coronavirus pandemic. COVID-19 has impacted many sectors negatively including travel, leisure, hospitality, retail and the arts.

However, the food delivery business has been soaring. More people across the globe are looking at alternative ways to access food. Door-to-door delivery services, like those offered by Marley Spoon, have provided a ready-made solution.

Demand for Marley Spoon's services has been skyrocketing and that has seen the Marley Spoon share price follow suit.

The group's results underline just how impressive FY20 has been for the German company.

Marley Spoon upgraded its full-year guidance to at least 70% revenue growth in 2020, up from an expected 30% previously. Quarterly revenue for its Australian arm rocketed 103% higher to 24 million euros (A$39.4 million).

Is there more growth ahead in 2021?

It's hard to bet against an ASX share that has rocketed more than 900% higher in 9 months. I personally think we'll see the company's shares continue to climb into 2021.

That's especially the case given surging COVID-19 case numbers across core markets in Europe and the United States. I do foresee slowing revenue growth in Australia though, as we settle into the 'new normal'.

However, momentum is a powerful tool. That could propel the Marley Spoon share price to a new record high before the year is out.

Foolish takeaway

I think the problem is that I don't see the long-term value play in the Marley Spoon share price. The company is perhaps a good short to medium-term hedge against the coronavirus pandemic impacts.

But longer term, there is a saturated market and perhaps a big drop-off in customer demand.

I won't be buying in at $2.84 per share but I wouldn't bet against it hitting the $3 mark in the near term either.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

A man looking at his laptop and thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors finished the trading week on a sour note today.

Read more »

Happy teen friends jumping in front of a wall.
Share Gainers

4 ASX 200 stocks smashing the benchmark this week

Investors are sending these four ASX 200 stocks soaring this week. But why?

Read more »

Woman with an amazed expression has her hands and arms out with a laptop in front of her.
Share Gainers

Why IGO, Johns Lyng, Lynas, and Web Travel shares are pushing higher today

These shares are ending the week on a high. But why?

Read more »

Happy teen friends jumping in front of a wall.
Share Gainers

Guess which 4 ASX 200 shares are rocking new 52-week highs today!

Investors just sent these four ASX 200 shares to one-year-plus highs.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why Evolution Mining, Orthocell, Platinum, and Turaco shares are charging higher

These shares are having a better day that most on Thursday.

Read more »

A man looking at his laptop and thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing hump day session for the ASX today.

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX managed to bank a small rise this Tuesday.

Read more »

Sport trainer talking to little girl who is climbing wooden ladder in gym.
Share Gainers

Why Vault Minerals, Droneshield, Westgold Resources shares are climbing higher today

These shares are gaining on Tuesday, but why?

Read more »