ASOS plc (ASC) AI Stock Analysis

• Market Cap: £315.08M
• Dividend Yield: N/A
• Average Volume (3M): 423.67K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.03
• Revenue Growth: -18.15%
• EPS Growth: -30.29%
• Country: UK
• Employees: 3,027
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Specialty Retail
• EPS (TTM): -2.84
• Shares Outstanding: 119,357,910
• 10 Day Avg. Volume: 365,712
• 30 Day Avg. Volume: 423,670
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.12
• Price to Cash Flow (P/CF): 1.30
• P/FCF Ratio: 1.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 370.00p
• Price Target Upside: 48.89% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

ASOS plc is currently facing significant challenges with declining sales and profitability, reflected in its financial performance and valuation. The technical analysis suggests bearish market momentum. However, improvements in operational efficiency and positive corporate events offer some hope for the future. The company's strategic initiatives and strong shareholder support may aid in recovery, but current financial struggles weigh heavily on the stock's performance.

Positive Factors

Earnings

The company's H1 EBITDA will be ahead of consensus, reflecting a strong gross margin improvement and cost discipline.

Sales Growth

ASOS own-brand full-price sales have returned to growth, with Test&React accounting for more than 15% of own-brand sales.

Negative Factors

Inventory Management

Another significant £100m inventory write-off is being taken as an 'exceptional' item.

Operational Challenges

ASC has announced plans to mothball its Atlanta DC, which has seen considerable investment since its opening in 2018.

ASOS plc Business Overview & Revenue Model

Company Description

ASOS plc (ASC) is a leading global online fashion and cosmetic retailer headquartered in the United Kingdom. The company specializes in providing a wide range of fashion products, including clothing, footwear, accessories, and beauty products, primarily targeting young adults. ASOS operates through its e-commerce platform, offering thousands of brands and its own-label products across various categories, catering to both men and women.

How the Company Makes Money

ASOS makes money primarily through the sale of fashion and beauty products via its online platform. The company generates revenue by offering a diverse range of products from third-party brands as well as its own private label. ASOS employs a direct-to-consumer model, allowing customers to browse and purchase items directly from their website and mobile app. Key revenue streams include product sales, which are bolstered by their own-brand offerings that typically yield higher margins. Additionally, ASOS leverages data analytics to optimize pricing, inventory, and marketing strategies, enhancing customer experience and driving sales. The company also benefits from its global reach, shipping to numerous countries worldwide, thus expanding its customer base. Strategic partnerships with various brands and designers, along with collaborations and exclusive product lines, further contribute to ASOS's revenue streams.

ASOS plc Financial Statement Overview

Summary

ASOS plc faces significant challenges with declining revenues and consistent net losses impacting its income statement. The balance sheet reflects a high leverage position, limiting financial flexibility. However, improvements in cash flow provide a positive outlook, indicating a need for strategic operational adjustments.

Income Statement

ASOS plc has faced declining revenues and profitability over the past few years. The revenue decreased from 2023 to 2024, marking a significant drop from previous years. The company has also experienced negative EBIT and EBITDA margins, reflecting operational inefficiencies and increased costs. Despite a strong revenue base, the ongoing net losses are concerning and indicate a need for strategic adjustments.

Balance Sheet

The balance sheet shows a moderate level of financial stability with a high debt-to-equity ratio and declining equity base. ASOS has a substantial amount of total debt compared to its stockholders' equity, which may pose challenges in managing financial obligations. However, the company maintains a reasonable cash balance, providing some liquidity cushion.

Cash Flow

ASOS's cash flow performance has shown improvement in operating cash flow, turning positive in 2024 after a negative trend in previous years. The free cash flow has also improved, although it still remains a concern due to the company's net income losses. Effective cash management will be crucial to sustain operations and facilitate strategic investments.

Breakdown
Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
2.90B	3.54B	3.94B	3.91B	3.26B
	Gross Profit
1.08B	1.39B	1.57B	1.64B	1.43B
	EBIT
-83.50M	-41.70M	-16.20M	193.60M	160.70M
	EBITDA
-153.60M	-79.50M	140.90M	325.80M	278.10M
	Net Income Common Stockholders
-338.70M	-223.10M	-30.80M	128.40M	113.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
382.90M	353.30M	323.00M	662.70M	407.50M
	Total Assets
2.27B	2.63B	3.00B	2.88B	1.99B
	Total Debt
977.70M	1.00B	856.00M	792.10M	313.10M
	Net Debt
594.80M	648.50M	533.00M	129.40M	-94.40M
	Total Liabilities
1.75B	1.76B	1.98B	1.85B	1.18B
	Stockholders Equity
521.30M	866.70M	1.01B	1.03B	810.30M
Cash Flow		Free Cash Flow
160.30M	-190.60M	-313.50M	52.60M	279.20M
	Operating Cash Flow
196.70M	-12.70M	-130.60M	209.70M	395.80M
	Investing Cash Flow
-133.50M	-177.90M	-182.90M	-443.50M	-116.60M
	Financing Cash Flow
-26.00M	222.70M	-26.30M	489.10M	143.70M

ASOS plc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 248.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ASC, the sentiment is Negative. The current price of 248.5 is below the 20-day moving average (MA) of 272.84, below the 50-day MA of 327.29, and below the 200-day MA of 372.37, indicating a bearish trend. The MACD of -11.61 indicates Negative momentum. The RSI at 43.96 is Neutral, neither overbought nor oversold. The STOCH value of 68.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:ASC.

ASOS plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NXT	77 Outperform	£13.13B	18.26	46.76%	1.92%	12.83%	15.54%
JD	77 Outperform	£3.49B	10.81	14.67%	1.38%	2.85%	61.98%
FRAS	66 Neutral	£2.37B	7.73	16.46%	―	-6.82%	-37.46%
Sector *	59 Neutral	$11.18B	10.04	-1.58%	3.96%	1.31%	-16.97%
SAGA	48 Neutral	£168.58M	―	-72.14%	―	15.70%	-119.71%
ASC	42 Neutral	£315.08M	―	-48.80%	―	-18.15%	-30.29%

ASOS plc Corporate Events

Frasers Group Increases Stake in ASOS to Over 25%

ASOS plc announced that Frasers Group Plc has increased its stake in the company, crossing a significant threshold of 25.13% of voting rights. This acquisition of voting rights indicates Frasers Group’s growing influence within ASOS, potentially impacting the company’s strategic decisions and market positioning.

ASOS Projects Profitability Boost in H1 FY25 Amid Strategic Growth

ASOS plc announced that it will release its H1 FY25 results on April 24, 2025, expecting significant profitability improvements despite volume challenges. The company attributes this to strong gross margin development, reduced markdown activity, and increased full-price sales, particularly in its own brands. ASOS’s Test & React model has been instrumental in driving growth, allowing the company to offer trend-setting products to its fashion-focused customer base. The anticipated revenue growth aligns with consensus expectations, with adjusted EBITDA projected to surpass consensus estimates.

ASOS plc Sees Shift in Major Shareholder Holdings

ASOS plc has announced a change in its major holdings, with Aktieselskabet af 5.5.2010 increasing its voting rights from 27.1% to 28.01%. This acquisition highlights a significant shift in the company’s shareholder structure, potentially impacting its strategic decisions and market positioning. The notification indicates a consolidation of control by Anders Holch Povlsen, who holds significant influence through various controlled undertakings. This development may have implications for stakeholders, as it could affect future corporate governance and decision-making processes within ASOS.

Frasers Group Increases Stake in ASOS PLC

ASOS PLC has announced a change in its major holdings, with Frasers Group Plc increasing its stake in the company. The acquisition of additional voting rights by Frasers Group, led by Michael Ashley, raises their total voting rights in ASOS to 24.21%. This move could potentially impact ASOS’s strategic decisions and influence its market positioning, reflecting Frasers Group’s growing interest and investment in the fashion retail sector.

ASOS Announces Block Listing for Employee Incentive Schemes

ASOS Plc announced a block listing application for 320,000 new ordinary shares on the London Stock Exchange, with an expected admission date of 11 February 2025. Of these, 300,000 shares will be allocated under the ASOS Plc Long-Term Incentive Scheme, while 20,000 shares will be for the ASOS Plc Sharesave Plan. The new shares will be fully paid and rank equally with existing shares, providing a strategic move to support employee incentive programs.

Frasers Group Increases Stake in ASOS to 23.38%

ASOS plc has announced that Frasers Group Plc has crossed a significant threshold in voting rights, now holding a total of 23.38% of total voting rights in ASOS. This change indicates a strategic move by Frasers Group, potentially impacting ASOS’s operational and strategic decisions, reflecting Frasers’ increasing influence and interest in ASOS’s future direction.

ASOS plc Successfully Passes All Resolutions at AGM with Strong Shareholder Support

ASOS plc announced the successful passage of all resolutions at its Annual General Meeting, emphasizing strong shareholder support for the company’s strategic direction and governance. Notably, resolutions on director elections and financial approvals received overwhelming backing, although two resolutions related to share allotment were withdrawn to address shareholder concerns. This outcome reflects ASOS’s commitment to engaging with stakeholders and maintaining strategic flexibility, potentially impacting its market positioning and shareholder relations positively.

ASOS Withdraws Key Resolutions from AGM Agenda Following Shareholder Feedback

ASOS plc has announced the withdrawal of Resolutions 18 and 19 from the agenda of its upcoming annual general meeting. These resolutions were special resolutions concerning the disapplication of pre-emption rights for the allotment of equity securities for cash, which aligned with the Pre-Emption Group’s 2022 Statement of Principles. The decision to withdraw was made following feedback from some shareholders, although the board believes the flexibility these resolutions would have provided is in the company’s best interest. The withdrawal does not impact the validity of the AGM notice or any votes for the remaining resolutions.

ASOS to Enhance Global Distribution, Boost US Market Efficiency

ASOS plc is set to enhance its global distribution network by reducing its stock levels and consolidating US operations to improve efficiency and profitability. By transitioning US fulfilment to its UK centre and a smaller US site, ASOS aims to offer a broader product range and faster delivery, while mothballing its Atlanta distribution center. These changes are expected to contribute £10-20m to annualized EBITDA from FY26, despite a significant one-time cost in FY25. The company remains optimistic about the US market’s potential for sustainable growth.