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Just Eat Takeaway share price is down 25%. Would I buy it?

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The short answer is yes, I would buy the Just Eat Takeaway (LSE: JET) share. I know that might sound confusing. After all, the share is down 25% in the past year. And in the interim, many stocks that were otherwise in a bad place because of the pandemic have risen fast. 

But this is exactly what makes the Just Eat Takeaway share attractive to me. At least some of the fast rising stocks have suffered financially during the past year because of the pandemic. On the other hand, its share price has fallen, but this FTSE 100 food delivery company is growing fast. 

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Robust trading update for Just Eat Takeaway

Earlier today, Just Eat Takeaway released its trading update for the second quarter of 2021, which covers the post-lockdown period and also its numbers since acquiring the US-based Grubhub, which was completed recently. Its orders have grown by a significant 37% compared to the same quarter last year. This was slower than the 51% rise for the first half of the year, but still good. 

Also, the company is optimistic about its growth prospects. It now expects ex-Grubhub order growth to be at 45% for 2021, up from the 42% expected earlier. I think this is an important update, because these orders are 75% of the total.

US numbers disappoint

I do have one concern, though. And that pertains to its US order growth, which has fallen to 14% in the second quarter of this year. This is almost half of that for the first half of the year. While it is encouraging that other big markets like the UK and Germany are still growing fast, the fact is that the US does produce 25% of its total orders. Even more glaring is the fact that the total value of orders placed has remained static in the market compared to the same quarter in 2020. 

Choosing market share over profits

There is also the question of profits for Just Eat Takeaway. But here, the company offers a good explanation. It is encouraged by its recent success in growing market share in the UK and particularly in London, where it saw triple-digit growth. In light of this it says that it will “continue to prioritise market share over adjusted EBITDA”. EBITDA is a measure of profit before deducting the likes of interest and taxes, among others. 

I buy the argument that fast growing companies in a relatively new industry, in this case, third-party food delivery apps, need to focus on market share. It is in a competitive market, where growing fast can hold it in good stead in the long term. 

My takeaway for the Just Eat Takeaway share

I am somewhat concerned about the slowdown in the US market, and would like to keep an eye out for further developments there in its next updates. This is especially because it would indicate how the Grubhub acquisition is progressing. 

On the whole, however, I think the Just Eat Takeaway share looks attractive to me at the current price levels. I maintain that it is a buy for me

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Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Just Eat N.V. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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