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.
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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.
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