When I see FTSE 250 Index shares up 30% in just over two weeks, I notice.

After all, the companies listed in the UK mid-cap index are generally quite immense and well-established. If their share prices suddenly surge, it is often a sign of robust trading and raised earnings forecasts.

Biggest FTSE 250 gain in July (so far!)

Ocado (LSE:OCDO) is a case in point. The retail technology specialist’s share price rose by around 10% on Tuesday, July 16, after the company said it expects to generate stronger underlying cash flow than expected this year (before various expenses).

At the time of writing, Ocado shares are up 30% since the start of July, making them the best performing index this month.

The stock is still far below its pandemic peak. But in my opinion, things may now be heading in the right direction for Ocado.

Should I consider buying the stock now, before any further gains? Let’s take a look.

Why am I interested in this?

I like to invest in FTSE 250 companies. Many of the stocks in my main personal portfolio are in the mid-cap index. I like them because they are compact enough to grow but immense enough to be proven, profitable businesses.

Ocado ticks almost all of these boxes. It was founded in Hatfield, north of London, in 2000. It now operates customers in Asia, North America and Europe, as well as the UK.

The company’s automated warehouses and robotic picking systems are very clever. We know they work, partly because the company also uses its own technology to run its grocery delivery business in the UK, in partnership with Marks & Spencer.

Ocado now has a growing customer base among other retailers who pay to exploit its technology.

Founder and CEO Tim Steiner believes selling this technology to other retailers will prove very profitable one day.

But that day has yet to come. Although Ocado is expected to have an annual turnover of £3bn this year, the company has never made a significant profit.

Broker forecasts suggest Ocado will post an annual loss of around £350m in 2024. Last year the figure was £387m.

Will Ocado make a profit – and should I buy?

The latest broker forecasts I see extend out to 2026 and still predict the company will make a loss of more than £250m.

I am inclined to believe that the company will eventually become profitable. But with a market capitalization of £2.8bn as I write this, I think some of that hope is already priced in.

Even if I were willing to pay 20 times forecast earnings for Ocado shares, that would still mean annual profits of around £140m.

This is significantly higher than the forecast loss of £350 million this year.

I think it’s possible that Ocado will start to turn a profit quickly once most of its current projects are complete and generating fees. It’s also worth remembering that the company is starting to expand beyond grocery, opening up modern opportunities.

However, City analysts who are better informed than me believe Ocado will not make a profit in 2025 or 2026.

For me 2027 and beyond is too long to rely on hope alone. I won’t be buying.