A global platform for the luxury fashion industry, Farfetch (FTCH) started in 2008 as an e-commerce marketplace for luxury boutiques around the world. A decade later, in September 2018, it went public on the New York Stock Exchange (NYSE) and issued approximately 33.6 million new shares.
Farfetch has grown from an e-commerce marketplace to a leading global brand in luxury fashion. It connects to customers in over 190 countries and has offices around the world, including London, Portugal, New York, United Arab Emirates and Brazil. Additional Farfetch businesses include Browns, New Guards Group and Stadium Goods. On December 9, 2021, it also acquired the resale platform LUXCLUSIF for an undisclosed amount.
However, the company has had a disappointing start to 2022 so far. In the first week of trading, FTCH stock fell 22.18% to close at $26.65, as of January 13, 2022. The stock had actually trended lower for the past three month of 2021. From a closing price of $37.50 on October 1, 2021 to end the year at $33.43, a decline of 10.85%.
Recently, Farfetch entered into advanced discussions with Richemont, a Swiss-based luxury goods holding company, to take a further step towards digitalizing the luxury fashion industry.
In this article, we take a look at the latest Farfetch stock news and get insights from analysts on the Farfetch stock forecast.
Fundamental Equity Analysis
On November 18 last year, the company released its third quarter 2021 financial results, reporting more than $1 billion in gross merchandise value (GMV). Compared to Q3 2019 levels, the group more than doubled its GMV. All of its three business segments, digital, branded and in-store, saw an increase in GMV from third quarter 2020 levels.
The company’s largest revenue contributor remains its digital platform, which recorded GMV of $828.5 million in Q3 2021, a 22.9% increase on platform GMV. digital form of $674.1 million for the third quarter of 2020.
However, the company did not generate positive cash flow from its operations for the three months ended September 2021 – and it had increased significantly compared to the same period in 2020. Cash outflows for the third quarter 2021 were $409.7 million compared to $84.6 million for the third quarter of 2020.
Regarding Farfetch’s gross margin figures, the company reported gross margin of $252.2 million in Q3 2021, representing an increase of approximately 20.66% over gross margin. in the third quarter of 2020 of $209 million.
Pleased with the gross asset value figures, Farfetch Founder, Chairman and CEO José Neves said:
“I’m pleased with Farfetch’s continued track record of aggressively capturing market share, as we accelerated the digital platform’s two-year GMV growth to 97% in the third quarter, and remain on track. on track to achieve our adjusted EBITDA profitability target for the full year. and GMV growth above our long-term target of 30% CAGR. »
Stock market news
Working with its previously acquired New Guards group, Farfetch has developed a line of premium wardrobe essentials called There Was One (TWO). Marketed as an environmentally conscious clothing line, TWO clothing comes in minimal recyclable packaging.
Launching on October 20, 2021, this digital-only sustainable brand is exclusively available on the Farfetch Marketplace. Following the announcement, FTCH stock jumped almost 5% the next day, from $40.16 to $42.13.
In 2020, with nationwide shutdowns imposed due to Covid-19, shopping experiences have shifted online from retail stores for most people. As a result, FTCH stock jumped 474.34% over the year. From a closing price of $11.11 on January 2, the stock closed 2020 at $63.81.
With ongoing vaccination campaigns and the global economy on the mend, Farfetch stock could not match its 2020 returns. $73.35 on February 19, 2021, it fell 46.08% in 2021, from $62 on January 4 to $33.43 on December 31.
Positive news for Farfetch shares has been the company’s recent talks of a tie-up with fellow online luxury retail brand Yoox-Net A Porter (YNAP).
Farfetch is expected to acquire a minority stake in YNAP’s business, which will lead to further synergies within the luxury fashion market. Richemont-owned YNAP will also benefit from Farfetch’s platform solutions to transition to a hybrid 1P/3P business model.
On November 12, 2021, markets responded positively to Richemont’s confirmation of its advanced strategies with Farfetch. In a single day, the stock jumped 17.66% from $39.41 on Nov. 11 to $46.37.
Future Price Predictions
Sharing a technical perspective on the FTCH stock chart, Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst at Gemstone Equity Research and Advisory Services, says:
According to Wallet Investor’s algorithmic forecast as of December 14, 2022, the target price of Farfetch stock could reach a range of $91.00 to $91.98 in December 2025, three years from now. Additionally, in its Farfetch stock price forecast, it was mentioned that the price could potentially close at $41.68 by December 2022.
Based on data compiled by Market Beats as of January 14, 2022, out of 12 analysts, nine rated FTCH stock as buy, one suggested sell and two recommended hold. Their consensus 12-month FTCH stock price forecast target is $53.67 per share, with the stock price projection ranging from a low of $32 to a high of $77. The current analyst consensus price target is 101.38% higher, based on the closing price of $26.65 on January 14, 2022.
On August 27, 2021, Wells Fargo’s Ike Boruchow upgraded FTCH stock to a strong buy, at a target price of $55. Credit Suisse’s Stephen Ju maintains a buy rating on the stock and has a price target of $71 as of November 19, 2021. However, on December 10, Societe Generale’s Abhinav Sinha launched his hedge on the stock. Farfetch stock and suggested a strong sell. with a price target of $32.
When researching FTCH stock forecasts, it’s important to keep in mind that analysts’ price forecasts and targets can be wrong. Farfetch stock analysis is based on conducting fundamental and technical studies of the stock’s performance. Past performance is not indicative of future results.
According to Market Beat, nine analysts gave the stock a Buy recommendation. As of November 18, 2021, it released strong financial results for the third quarter of 2021 and is currently advancing discussions with Richemont-owned YNAP to create more synergies in luxury fashion markets.
Note that analysts’ predictions may be wrong. Forecasts should not replace your own research. Always do your due diligence before investing and never invest or trade money you cannot afford to lose.
According to an algorithmic app, Wallet Investor, FTCH stock price could hit $91.98 in December 2025.
However, it should be remembered that analyst forecasts can be wrong and have been inaccurate in the past.
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