Asos is a leading online fashion retailer founded in the UK in 2000 by Nick Robertson, Andrew Regan, Quentin Griffiths and Deborah Thorpe in London. Asos has established itself as a major player in the e-commerce fashion industry.
The London-listed company has extensive product offerings, which include both in-house brands and third-party labels. Asos currently has 13 own brands and labels: ASOS Design, ASOS Luxe, ASOS Edition, ASOS 4505, Collusion, Crooked Tongues, Dark Future, HIIT, Miss Selfridge, Reclaimed Vintage, Topman, Topshop, and Weekend Collective.
The current CEO of Asos is José Antonio Ramos Calamonte. In 2001, ASOS was admitted to the Alternative Investment Market (AIM) on the London Stock Exchange. However, it has since moved to the main market of the London Stock Exchange, trading under the ticker symbol ASC.
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Asos Share Price
The Asos share price has had a challenging past few years. In 2018, the stock traded well over 7,500p per share. However, it is now below the 400p mark after challenges, including fierce competition, changing consumer tastes, inventory problems, and declining sales and profitability, heaped pressure on the company.
P/E Ratio Average Over the Last Ten Years: 37.4x (source: Finbox)
Asos EPS and Revenue Breakdown 2020-2023
| ASC | Annual EPS | Annual Revenue |
|---|---|---|
| 2020 | £1.26 | £3.26 billion |
| 2021 | £1.25 | £3.91 billion |
| 2022 | £-0.31 | £3.94 billion |
| 2023 | £-2.13 | £3.55 billion |
Fashion Industry Comparison
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Asos Share Price Forecast
Overall, two analysts have assigned Asos shares a Buy rating, 12 assigned it a Hold rating, and six a Sell rating.
A View From The Bulls: Recent bullish commentary on Asos is somewhat tough to locate, but in November 2023, analysts at Deutsche Bank initiated coverage of Asos with a Buy rating and a 500p price target. The bank said its preference in UK retail is for ASOS, B&M and M&S, with all having “specific and interesting” investment cases. Deutsche Bank said, at the time, that it believed UK retailers are generally in good shape.
A View From The Bears: On the other hand, more recently (early May 2024),Liberum lowered its price target for Asos to 300p from 360p per share, reiterating a Sell rating on the stock. The investment firm said it struggles “to see a quick turnaround of the ongoing sales decline at ASOS,” also noting a “risk of further shareholder dilution [or the] sale of key assets.”
Average Analyst Consensus 12-Month Price Target: 370p
Our View: The Asos decline does, at first glance, look like it has the potential to be a good turnaround story. However, the company is still contending with significant headwinds impacting the business that first need to be dealt with.
Who Might Buy Asos Shares
Similarly to fellow online retailer Boohoo, Asos has faced challenges recently. While it presents a potential recovery story, certain characteristics still make it better suited for certain investor types.
As with other online retailers not named Shein,Asos has faced challenges such as increased competition, declining sales, and operational issues. However, Asos’ platform and its various brands still maintain a strong presence. As a result, investors with a long-term horizon might find Asos shares appealing as a potential turnaround story, although they should expect volatility along the way.
Given the rise in inflation and the pressure on consumer wallets, online retailers have struggled. However, the industry does have potential for growth. Investors with the belief that Asos can navigate the current environment and return to growth might find the stock a strategic addition to their portfolio.
Asos’s share price has significantly declined in recent years. Value investors who believe the company is undervalued may see the current share price as a good entry point.
Asos, alongside Boohoo, came under scrutiny regarding “greenwashing” claims. Investors who prioritise ethical considerations should evaluate Asos’s efforts and progress in these areas before making an investment decision.
