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ASOS plc (GB:ASC)
LSE:ASC

ASOS plc (ASC) AI Stock Analysis

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GB

ASOS plc

(LSE:ASC)

49Neutral
ASOS plc's overall stock score reflects a struggling financial performance with declining revenues and high leverage, significantly impacting its outlook. Although technical analysis offers some stabilization, valuation remains a concern due to negative profitability. However, earnings call insights and corporate events present a strategic shift towards improved profitability, providing some optimism amid ongoing challenges.
Positive Factors
Financial Performance
The company's EBITDA guidance for the fiscal year is consistent with market expectations, indicating financial stability.
Revenue Growth
ASOS own-brand full-price sales have returned to growth, with Test&React accounting for more than 15% of own-brand sales.
Strategic Initiatives
ASOS has made progress on strategic initiatives and reported a return to growth in ASOS Design.
Negative Factors
Operational Changes
The move to mothball the Atlanta DC represents a telling retreat for the business.
Profitability Challenges
Despite improvement, the EBITDA margin remains insufficient to reach overall profitability.
Revenue Decline
ASOS' revenue is down by 13% as previously indicated.

ASOS plc (ASC) vs. S&P 500 (SPY)

ASOS plc Business Overview & Revenue Model

Company DescriptionASOS plc (ASC) is a leading British online fashion and cosmetic retailer, catering primarily to a young adult demographic. Founded in 2000, the company has established itself as a go-to destination for trendy and affordable fashion. ASOS offers a wide range of clothing, footwear, accessories, and beauty products, with an emphasis on creating a diverse and inclusive shopping experience. The company operates globally, delivering products to customers in various countries and providing a platform for independent brands to reach a broader audience.
How the Company Makes MoneyASOS plc generates revenue primarily through the sale of fashion and beauty products via its online platform. The company operates a direct-to-consumer model, selling its own branded products alongside items from third-party brands. Key revenue streams include retail sales from its website and mobile app, which are bolstered by a strong logistics network that enables efficient global distribution. ASOS also benefits from its ASOS Marketplace, a platform for independent brands and vintage boutiques, which contributes to its revenue. The company invests heavily in marketing, technology, and customer service to enhance customer experience and drive sales. Additionally, ASOS engages in strategic partnerships with various brands and influencers to expand its reach and appeal.

ASOS plc Financial Statement Overview

Summary
ASOS plc faces significant financial challenges, with declining revenues and consistent net losses affecting the income statement. The balance sheet shows high leverage, limiting financial flexibility, although cash flow improvements offer some hope. The company must address operational inefficiencies to achieve sustainable growth.
Income Statement
35
Negative
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
45
Neutral
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
50
Neutral
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
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
2.69B2.90B3.54B3.94B3.91B3.26B
Gross Profit
1.07B1.08B1.39B1.57B1.64B1.43B
EBIT
-23.10M-83.50M-41.70M-16.20M193.60M160.70M
EBITDA
-123.00M-153.60M-79.50M140.90M325.80M278.10M
Net Income Common Stockholders
-294.30M-338.70M-223.10M-30.80M128.40M113.30M
Balance SheetCash, Cash Equivalents and Short-Term Investments
220.70M382.90M353.30M323.00M662.70M407.50M
Total Assets
1.72B2.27B2.63B3.00B2.88B1.99B
Total Debt
731.80M977.70M1.00B856.00M792.10M313.10M
Net Debt
511.10M594.80M648.50M533.00M129.40M-94.40M
Total Liabilities
1.40B1.75B1.76B1.98B1.85B1.18B
Stockholders Equity
320.80M521.30M866.70M1.01B1.03B810.30M
Cash FlowFree Cash Flow
87.10M160.30M-190.60M-313.50M52.60M279.20M
Operating Cash Flow
96.20M196.70M-12.70M-130.60M209.70M395.80M
Investing Cash Flow
40.20M-133.50M-177.90M-182.90M-443.50M-116.60M
Financing Cash Flow
-248.40M-26.00M222.70M-26.30M489.10M143.70M

ASOS plc Technical Analysis

Technical Analysis Sentiment
Positive
Last Price321.50
Price Trends
50DMA
284.73
Positive
100DMA
337.64
Negative
200DMA
362.73
Negative
Market Momentum
MACD
5.56
Negative
RSI
60.19
Neutral
STOCH
88.73
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ASC, the sentiment is Positive. The current price of 321.5 is above the 20-day moving average (MA) of 300.12, above the 50-day MA of 284.73, and below the 200-day MA of 362.73, indicating a neutral trend. The MACD of 5.56 indicates Negative momentum. The RSI at 60.19 is Neutral, neither overbought nor oversold. The STOCH value of 88.73 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:ASC.

ASOS plc Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
£1.35B6.872.95%-10.46%396.13%
64
Neutral
£836.68M890.75%0.40%5.32%-152.26%
GBAO
63
Neutral
£567.22M21.6720.28%-0.39%2.68%
61
Neutral
$6.98B11.352.88%3.90%2.65%-21.84%
GBASC
49
Neutral
£383.50M-62.59%-15.86%-18.46%
GBTHG
49
Neutral
£419.53M-27.20%-14.37%-28.78%
48
Neutral
£292.20M-96.36%-16.32%-202.39%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:ASC
ASOS plc
318.00
-50.40
-13.68%
GB:DEBS
boohoo group Plc
21.85
-13.53
-38.24%
GB:AO
AO World
104.20
-4.40
-4.05%
GB:CURY
Currys plc
123.10
51.30
71.45%
GB:THG
THG
26.00
-47.65
-64.70%
GB:MOON
Moonpig Group Plc
253.50
92.81
57.76%

ASOS plc Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q2-2025)
|
% Change Since: 3.71%|
Next Earnings Date:Oct 15, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a strategic shift towards sustainable and profitable growth, with significant improvements in profitability metrics and operational efficiency. However, challenges remain in growing sales and customer base, particularly in the US market and third-party brand performance.
Q2-2025 Updates
Positive Updates
EBITDA Improvement
Increased EBITDA by approximately £60 million compared to last year, indicating a 30% rise in variable contribution over the last six months.
Gross Margin Growth
Gross margin increased by almost 500 basis points due to a better full price mix and reduced discounting.
Own Brands Full Price Business Growth
ASOS's own brands saw growth in full price business globally, with ASOS Design in the UK growing by 9%.
Reduction in Supply Chain Costs
Supply chain costs were reduced by 20%, contributing to operational efficiency.
Successful Launch of Test & React
Test & React now constitutes 15% of own brand sales, with plans to increase to 20%. The model improved reaction to market trends and quality.
Cost Efficiency and Stock Turn Improvement
Implemented cost management discipline and accelerated stock turn by 35%, allowing better capital use.
Loyalty Program Introduction
ASOS launched the ASOS.WORLD loyalty program, aiming to enhance customer engagement and retention.
Negative Updates
US Market Sales Decline
Sales in the US dropped by 28% due to reduced stock, promotions, and performance marketing, despite an increase in variable contribution.
Overall Sales Decline
Adjusted constant currency sales declined by 13% year-on-year, reflecting reductions in unprofitable performance marketing and inventory.
Challenges in Active Customer Growth
Experiencing declines in active customers due to reduced product availability, promotions, and marketing investment.
Third-Party Brand Performance
Sales performance of third-party brands was weaker, although profitability improved.
Company Guidance
In the call, ASOS provided guidance on their performance and strategic direction, highlighting several key metrics. The company reported an increase in EBITDA by approximately £60 million compared to the previous year, indicating significant progress in their strategic initiatives. This improvement was driven by a 490 basis point increase in gross margin and a focus on cost efficiencies. The company emphasized the success of their new commercial model, which led to a full price business growth of 12 points compared to last year and a 35% acceleration in stock turn. ASOS also noted a reduction in supply chain costs by 140 basis points and a decrease in the underlying return rate by 150 basis points. Despite a 13% year-on-year decline in adjusted constant currency sales, the company's efforts to improve profitability are evident. Looking ahead, ASOS expects gross margins to surpass 46% and adjusted EBITDA to grow at least 60%, reaching between £130 million and £150 million for FY 2025. They also aim for a return to revenue growth, supported by the scaling of their Flexible Fulfillment models. Additionally, ASOS anticipates meaningful free cash flow inflow in FY 2026, driven by continued improvements in their operating model and gross margins.

ASOS plc Corporate Events

Business Operations and StrategyRegulatory Filings and Compliance
ASOS plc Announces Change in Major Holdings
Neutral
May 6, 2025

ASOS plc has announced a change in its major holdings, with Aktieselskabet af 5.5.2010 and Nine United Properties UK Ltd. increasing their voting rights to 29.012157%. This acquisition of voting rights reflects a slight increase from the previous position and indicates a consolidation of influence by entities associated with Anders Holch Povlsen. This development could impact ASOS’s strategic decisions and stakeholder dynamics, given the significant voting power now held by these entities.

Spark’s Take on GB:ASC Stock

According to Spark, TipRanks’ AI Analyst, GB:ASC is a Neutral.

ASOS plc’s overall score reflects significant financial challenges, particularly declining revenues and high leverage. While technical indicators suggest potential stabilization, valuation concerns persist due to negative profitability. Recent earnings call and corporate events provide some optimism for strategic growth, but immediate operational and market challenges weigh heavily on the stock’s current outlook.

To see Spark’s full report on GB:ASC stock, click here.

Regulatory Filings and Compliance
ASOS PLC Announces Change in Voting Rights Structure
Neutral
May 6, 2025

ASOS PLC has announced a change in the breakdown of its voting rights, with Aktieselskabet af 5.5.2010 and Nine United Properties UK Ltd. being the entities involved. The notification indicates that the total voting rights held by these entities have slightly decreased from 29.032636% to 28.993269%, which may impact the company’s governance dynamics and stakeholder influence.

Spark’s Take on GB:ASC Stock

According to Spark, TipRanks’ AI Analyst, GB:ASC is a Neutral.

ASOS plc’s overall score reflects significant financial challenges, particularly declining revenues and high leverage. While technical indicators suggest potential stabilization, valuation concerns persist due to negative profitability. Recent earnings call and corporate events provide some optimism for strategic growth, but immediate operational and market challenges weigh heavily on the stock’s current outlook.

To see Spark’s full report on GB:ASC stock, click here.

Regulatory Filings and Compliance
ASOS Announces Total Voting Rights Update
Neutral
May 1, 2025

ASOS Plc has announced that, as of May 1, 2025, its issued and fully paid share capital consists of 119,519,975 ordinary shares, each with a nominal value of 3.5 pence and one voting right per share. This total number of voting rights should be used by shareholders to determine their notification requirements under FCA Disclosure and Transparency Rules. This announcement provides clarity on the company’s share structure, which is crucial for shareholders in managing their investments and ensuring compliance with regulatory requirements.

Spark’s Take on GB:ASC Stock

According to Spark, TipRanks’ AI Analyst, GB:ASC is a Neutral.

ASOS plc’s overall score reflects financial difficulties, particularly high leverage and declining revenues. However, strategic initiatives and improved cash flow suggest potential for recovery. Technical indicators show moderate positive sentiment, but valuation concerns remain due to negative profitability.

To see Spark’s full report on GB:ASC stock, click here.

Business Operations and StrategyFinancial Disclosures
ASOS Reports Profitability Transformation Amid Strategic Initiatives
Positive
Apr 24, 2025

ASOS plc has reported a significant transformation in profitability for the first half of the fiscal year 2025, driven by a new commercial model and cost discipline. Despite a 13% decline in adjusted group revenue, the company achieved a positive adjusted EBITDA of £42.5 million, a notable improvement from the previous year’s loss. The company’s strategic initiatives, including the scaling of its Test & React model and the introduction of new brands, have contributed to a 9% increase in ASOS Design sales in the UK. ASOS is also enhancing its US market proposition and expects continued growth in full-price sales and profitability in the coming years.

Spark’s Take on GB:ASC Stock

According to Spark, TipRanks’ AI Analyst, GB:ASC is a Neutral.

ASOS plc’s overall stock score reflects significant financial challenges, particularly declining revenues and high leverage. While technical indicators suggest potential stabilization, valuation concerns persist due to negative profitability. Recent earnings call and corporate events provide some optimism for strategic growth, but immediate operational and market challenges weigh heavily on the stock’s current outlook.

To see Spark’s full report on GB:ASC stock, click here.

Business Operations and Strategy
Frasers Group Increases Stake in ASOS to Over 25%
Neutral
Mar 21, 2025

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.

Business Operations and StrategyFinancial Disclosures
ASOS Projects Profitability Boost in H1 FY25 Amid Strategic Growth
Positive
Mar 21, 2025

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.

Business Operations and StrategyRegulatory Filings and Compliance
ASOS plc Sees Shift in Major Shareholder Holdings
Neutral
Mar 19, 2025

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.

M&A TransactionsBusiness Operations and Strategy
Frasers Group Increases Stake in ASOS PLC
Neutral
Mar 13, 2025

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.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.