Fundamental analysis
About you is a German online fashion retailer, technology company and the first unicorn (a company with a valuation of more than USD 1 billion) from Hamburg. Founded in 2014, About you operates in 25 European countries including the Czech Republic. The company’s main focus is selling clothes through its own app directly from smartphones.
The company has historically had more than 45 million customers and offers more than 600,000 items and 3,800 brands.
The IPO was 16.6.2021.
The online fashion market is a relatively new industry even in e-commerce. In Europe, the market size is roughly 166 billion Euro in 2023. The estimated trend is that the market will grow by roughly 10% per year. Overall, the European market is smaller than the market in China. The estimated annual spend per customer is 420 Euro.
The company targets young women, who make up more than 80% of shoppers.
The turnover distribution is 46% DACH, 54% other markets.
Results
The company itself estimates that the European online market in which it operates is €86 billion, while the offline market is €238 billion. Online will steal the offline, there is a lot of room for growth. On top of that, the online market is very fragmented. The top 10 companies together have a market share of only 30%, the rest is scattered for among other players. Thus, market consolidation offers a very decent scope for growth.
The company’s priority is just focusing on mobile. 85% of turnover comes through the mobile app which, together with collaboration with influencers, brings organic growth of up to 74%.
The company is growing sales at 10% a year, even 50% a year before covid. It currently has 12 million active customers in the last 12 months.
Despite these prospects, the company is still in the red. EBITDA has always been negative for the last 4 years. The company expects positive EBITDA in Q1 2024. The company has high costs mainly due to high inventory and purchasing costs.
Technical analysis
Due to the company’s short time on the market, we use H4 chart, not D1.
Since the IPO, the company has been in a downtrend, with the moving averages only crossing at a possible change in trend.
The RSI is in the neutral zone.
The company’s volume is low, so the stock is susceptible to stronger swings. Incidentally, its beta is 1.90 and thus not very dependent on the indices.
Conclusion
Technical analysis is always inferior to strong fundamentals, but a possible first crossing of moving averages on an uptrend is an interesting signal.
About you is currently growing at a rate of 10% per year, which roughly matches the growth of the online fashion market itself. But the company has room to grow, as evidenced by their determination to attack the partially offline market. Further, the company expects to be profitable as early as next year thanks to higher sales and economies of scale. It is still a relatively young technology company. The possible purchase of other players in the market may help About You to grow further.
If the company manages to stick to its plan and be profitable next year, it could be a very positive signal for the stock price to rise. It is now very low since its IPO.
About you proves that Germany does not only produce cars, but also offers new technology companies.