HelloFresh falls to €2.65 as the market prices in its disappearance

HelloFresh bleeds out on the stock market: at €2.65, investors are pricing in its disappearance

Why is HelloFresh falling to €2.65 when its results show profits and cash? According to a forum participant, the answer lies in a slide from the preliminary results presentation that anticipates a contraction of the business. The market, which demands growth, punished the stock to all-time lows. The company is worth less than 10% of its sales, a valuation which, according to circulating calculations, assumes the business disappears. That is not the case: HelloFresh generated €50 million in cash in the first half and expects to exceed €100 million in 2026.

The slide that triggered the storm

The trigger was, according to a forum participant, a chart included in the results presentation. It anticipated a contraction of the business over the coming quarters. The market reacted with massive selling. The share price went from €3.42 to €2.65 in just a few sessions, a drop of more than 20%. The management team, critics say, failed to communicate that this is a deliberate decision: sacrificing revenue to gain profitability. The company has raised prices to push out unprofitable customers who only bought with coupons and discounts. That strategy reduces turnover but improves margins. The market, however, only sees falling sales.

The contradiction in the numbers: cash, margins and debt

The published results show a company that makes money. HelloFresh has €246.9 million in cash, up from €211.1 million a year earlier. Its bank debt and bonds total €174 million. It generates cash: €50 million in the first half, and forecasts point to more than €100 million in 2026. The percentage margin is rising again. The company has stopped burning cash. Yet the market values the stock at 0.1 times sales, implying that investors believe the business will disappear. Some argue that this narrative clouds good judgment and that, at some point, the market cap will triple.

The business: from meal kits to prepared meals

HelloFresh is the world leader in subscription meal kits. The pandemic boosted its business, but the end of restrictions was a blow. The company has diversified into the prepared meals business (Ready to Eat) with the acquisition of Factor in the United States, where it has the third-largest kitchen facilities in the country. It has also launched Factor in Germany. The challenge is to stabilise revenue and prove that the business is profitable and cash-generative. If it succeeds, the market should apply the multiples of a going concern, not of a company in liquidation. That is where the rerating would come.

Activism enters the scene

The company is in the crosshairs of activist investors. By their calculations, the stock is practically being given away: a €2 billion market cap on turnover of more than €6 billion. A fund could launch a squeeze-out takeover bid at €5 or €6 per share, a premium of 50-80% over the current price. The activist Schuhbauer has increased his stake with additional purchases of more than €1 million in just a few days. That inflow of money explains part of the recent rise from €2.65 to €2.89. Short sellers, who had driven the stock to its lows, are being forced to close their positions.

The valuation debate: €10, €12 or €14?

The most optimistic projections put the target price at €14 per share. That would imply a €2 billion market cap, with EBITDA of €500 million (a multiple of 8 times) and sales of €5.5 billion. The question is whether HelloFresh can reach a 10% EBITDA margin. With €6 billion in turnover, that would be €600 million of EBITDA, minus €200-250 million of annual capex, leaving €400 million of free cash flow. At a multiple of 5 times, the valuation would be €2 billion, more than €13 per share. The most conservative scenario talks about €10-12. The company needs to break the narrative that it cannot stabilise the business.

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The stock remains in a downtrend. The chart has not yet shown clear accumulation. Those who bought at the lows celebrate every bounce. Those who averaged down do too. But the market gives nothing away: HelloFresh has to prove it can stop shrinking and return to growth in the second half. If it does, the rise could be vertical. If not, the slide will keep being right.