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Ao World (GB:AO)
:AO
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AO World (AO) AI Stock Analysis

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GB:AO

AO World

(LSE:AO)

Rating:63Neutral
Price Target:
AO World's stock score reflects a blend of moderate financial performance and neutral technical indicators. While improved profitability and cash flow metrics are positive, the declining revenue trend and asset base contraction are concerns. Valuation appears fair but lacks dividend yield. The absence of earnings call data and corporate events limits additional insights.
Positive Factors
Financial Performance
AO has reported results in line with expectations, marking the end of a very successful year.
Growth Prospects
Strong growth is anticipated for the next year, leveraging its growing membership proposition and outstanding customer-facing fundamentals.
Profitability
The business returned to robust growth while delivering a record profit performance, even surpassing the COVID-boosted FY21.
Negative Factors
Membership Strategy
There is a noticeable emphasis on the importance of Membership as the biggest driver of top-line growth plans.
Non-MDA Growth
AO is leveraging customer buy-in to drive share of wallet, loyalty, and non-MDA growth.

AO World (AO) vs. iShares MSCI United Kingdom ETF (EWC)

AO World Business Overview & Revenue Model

Company DescriptionAO World plc, together with its subsidiaries, operates as an online retailer of domestic appliances and consumer electronics in the United Kingdom and Europe. The company retails fridge freezers, cookers and washing machines, and audiovisual equipment, as well as computing, mobile, and gaming products. It also provides logistics and transport services. In addition, the company engages in the investment activities; and WEEE recycling activities. AO World plc sells its products through its websites and third-party websites. AO World plc was founded in 2000 and is headquartered in Bolton, the United Kingdom.
How the Company Makes MoneyAO World generates revenue through the online sale of electrical appliances and consumer electronics. The company's primary revenue stream is the direct sale of these products via its e-commerce platforms in the UK and Germany. Additionally, AO offers ancillary services such as product delivery, installation, and recycling of old appliances, which contribute to its revenue. The company also partners with various manufacturers and suppliers to ensure a wide product range and competitive pricing. AO's business model emphasizes enhancing customer satisfaction through efficient logistics and exceptional service, which helps drive repeat business and customer loyalty.

AO World Financial Statement Overview

Summary
AO World has shown improvement in profitability and cash flow metrics, reflecting operational efficiency. However, declining revenue and asset base contraction pose challenges for future growth.
Income Statement
65
Positive
AO World has shown improvement in profitability metrics over the years. The gross profit margin of 23.41% for the last annual period indicates efficient cost management. The net profit margin has recovered to 2.38% from a negative margin in the prior year, signaling a return to profitability. This is supported by a positive EBIT margin of 3.48% and an EBITDA margin of 6.25%. However, revenue has declined over the past three years, with a revenue decrease of 8.71% year-over-year. This declining revenue trend poses a risk to sustained profitability growth.
Balance Sheet
70
Positive
The balance sheet shows a solid capital structure with a debt-to-equity ratio of 0.51, suggesting moderate leverage. Return on equity (ROE) has improved significantly to 17.92%, reflecting effective utilization of equity to generate profits. The equity ratio stands at 31.20%, indicating a stable proportion of equity financing. However, the company's total assets have decreased, which might affect future expansion capabilities.
Cash Flow
75
Positive
Cash flow analysis reveals a strong operating cash flow to net income ratio of 2.49, indicating robust cash generation relative to reported profits. Free cash flow has increased significantly, with a growth rate of 140.09% year-over-year, showcasing improved cash efficiency. The free cash flow to net income ratio is 2.16, which is favorable. These metrics highlight the company's robust cash flow management, although past volatility in operating cash flow remains a concern.
BreakdownMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income Statement
Total Revenue1.04B1.14B1.56B1.66B1.05B
Gross Profit243.30M238.30M269.40M292.50M178.30M
EBITDA65.00M44.50M23.70M51.10M26.90M
Net Income24.70M-2.60M-30.40M17.70M1.70M
Balance Sheet
Total Assets441.80M460.30M549.20M615.70M449.00M
Cash, Cash Equivalents and Short-Term Investments40.10M19.10M19.50M67.10M6.90M
Total Debt70.90M95.30M153.60M95.30M106.00M
Total Liabilities304.00M354.60M476.80M519.30M369.30M
Stockholders Equity137.80M105.70M73.40M97.70M80.70M
Cash Flow
Free Cash Flow53.30M22.30M-62.00M105.50M6.10M
Operating Cash Flow61.60M24.40M-52.40M114.60M14.10M
Investing Cash Flow-7.60M7.70M-9.60M-9.10M-7.90M
Financing Cash Flow-33.00M-32.30M14.40M-45.30M-28.20M

AO World Technical Analysis

Technical Analysis Sentiment
Negative
Last Price93.10
Price Trends
50DMA
97.45
Negative
100DMA
97.09
Negative
200DMA
100.18
Negative
Market Momentum
MACD
-1.12
Positive
RSI
37.70
Neutral
STOCH
16.52
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:AO, the sentiment is Negative. The current price of 93.1 is below the 20-day moving average (MA) of 95.88, below the 50-day MA of 97.45, and below the 200-day MA of 100.18, indicating a bearish trend. The MACD of -1.12 indicates Positive momentum. The RSI at 37.70 is Neutral, neither overbought nor oversold. The STOCH value of 16.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:AO.

AO World Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
£1.23B11.305.01%-10.46%396.13%
64
Neutral
£689.62M890.75%0.48%5.32%-152.26%
63
Neutral
£529.67M50.876.87%-0.39%2.68%
62
Neutral
$16.51B10.46-8.28%3.32%1.44%-22.58%
55
Neutral
£468.89M-27.20%-14.37%-28.78%
51
Neutral
£383.10M-62.59%-15.86%-18.46%
48
Neutral
£232.75M-96.36%-16.32%-202.39%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:AO
AO World
93.10
-23.70
-20.29%
GB:ASC
ASOS plc
310.00
-52.20
-14.41%
GB:DEBS
boohoo group Plc
17.42
-14.14
-44.80%
GB:CURY
Currys plc
112.90
30.85
37.60%
GB:THG
THG
30.32
-34.23
-53.03%
GB:MOON
Moonpig Group Plc
214.00
-4.03
-1.85%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Apr 29, 2025