Does The Data Make ASOS Plc (LON:ASC) An Attractive Investment?
Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on ASOS Plc (LON:ASC) due to its excellent fundamentals in more than one area. ASC is a financially-healthy company with a great history and a excellent growth outlook. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on ASOS here.
Excellent balance sheet with solid track record
Investors in search of impressive top-line expansion should look no further than ASC, with its expected 52% revenue growth in the upcoming year. This underlies the notable 22% return on equity over the next few years leading up to 2021. In the previous year, ASC has ramped up its bottom line by 77%, with its latest earnings level surpassing its average level over the last five years. Not only did ASC outperformed its past performance, its growth also exceeded the Online Retail industry expansion, which generated a 5.8% earnings growth. This paints a buoyant picture for the company.
ASC currently has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, which is rather impressive for a UK£4.7b market cap company. ASC has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.
Next Steps:
For ASOS, I’ve compiled three pertinent factors you should further research:
Valuation: What is ASC worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ASC is currently mispriced by the market.
Dividend Income vs Capital Gains: Does ASC return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from ASC as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ASC? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
