• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Investing Boohoo vs Asos: Which is the better UK e-commerce stock?
Investing

Boohoo vs Asos: Which is the better UK e-commerce stock?

by December 23, 2022
by December 23, 2022 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Boohoo (LON: BOO) and Asos (LON: ASC) share prices have had a terrible performance in 2022. They dropped by more than 90% and shed millions of pounds in market cap. Boohoo, which was valued at over £3 billion in 2020 has a market cap of just £430 million. Similarly, Asos’s market cap has dropped to about £496 million.

The fall of British e-commerce

Boohoo and Asos performance is a reflection of the challenges facing British e-commerce startups. Other tech firms have also struggled. Made.com filed for bankruptcy and was later acquired by Next PLC. Similarly, THG, formerly known as The Hut Group, has seen its market cap crash to about £619 million.

Asos and Boohoo stocks have plunged as the companies have faced significant headwinds. Demand has plunged as inflation jumped to a multi-decade high. Further, the companies have seen a significant increase of returns while growth has slowed.

Most importantly, the two companies have announced several profit warnings in 2022. Boohoo warned about its profits three times this year while Asos warned that its profit could drop to just £20 million in 2022 from £190 million in the previous year.

As a result, the companies have come under significant financial strain. As I wrote in this article, Asos recently hired restructuring experts PJT Partners for advice about its hefty debt. Some of its creditors include HSBC, Lloyds, and Barclays. It is never a good sign when a company moves into restructuring talks.

The most recent results showed that Boohoo’s revenue dropped by 10% to £882 million in the six months to August. Its adjusted EBITDA dropped by 58% to £35.5 million while its net debt dropped to minus £10 million.

Asos, on the other hand, lost £32 million in its financial year as consumers spent less money on fashion. That loss compared with a profit of £177 million in 2021. 

Better buy between Boohoo and Asos

Asos and Boohoo are both risky companies that are facing substantial challenges. With the UK set to remain in a recession in 2022, the two firms will likely continue struggling in 2023. 

Nonetheless, I feel like Boohoo is a better buy than Asos. It has a loyal fanbase and a strong brand in the UK. It is also growing in other geographies than in the United States. 

Boohoo’s finances also appear to be in a better shape than Asos. It has over £325 million in total debt while Asos has over £475 million. 

Still, as shown below, the two stocks have a close correlation, meaning that their returns will be similar unless one moves into administration. In this regard, Asos is at a bigger risk for going under than Boohoo.

Boohoo vs Asos chart by TradingView

The post Boohoo vs Asos: Which is the better UK e-commerce stock? appeared first on Invezz.

You Might Also Like
  • Rent the Runway stock surged: What can go wrong?
  • Jim Cramer recommends owning homebuilder stocks: here’s why
  • Consumer price inflation almost at its peak, says ECB economists
  • 2 takeaways after area PMIs hint at a brighter inflation outlook
Share
0
FacebookTwitterPinterestWhatsapp

previous post
This retail stock is ‘safe haven’ for recession: Piper Sandler’s Keith
next post
Why do people criticise CPI as a measure of inflation?

You may also like

Options Delta Explained: Sensitivity To Price

April 22, 2023

Don’t buy ARKK ETF stock in 2023: Buy this alternative...

December 28, 2022

Goldman Sachs Moves Euro Swap Trading Desk from London

November 30, 2022

The digital pound will not track retail users, UK minister...

January 10, 2023

4 economic events to move the FX market in the...

December 29, 2022

European Central Bank says Bitcoin is dead

December 1, 2022

Rolls-Royce stock price forecast 2023: risks and opportunities

January 2, 2023

Silvergate Capital shares plunge nearly 50% amid crypto-related negativity

January 5, 2023

Apple stock price forecast: Morgan Stanley sees a whopping 75%...

December 16, 2022

World Cup shock dumps Argentina token

November 24, 2022

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Oil prices rise more than 1% as Israel vows to intensify attacks on Iran

      June 20, 2025
    • RRG Alert Tech Vaults to ‘Leading’—Is XLK Signaling a New Rally?

      June 20, 2025
    • Apple looking to make ‘premium’-priced folding iPhones starting next year, analyst says

      June 20, 2025
    • Nike pushes back Skims launch with Kim Kardashian due to production delays

      June 19, 2025
    • The Fed Is Getting It Wrong AGAIN As They Hold Rates Steady

      June 19, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,599 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,874 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,578 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,541 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,417 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,142)
    • Investing (538)
    • Stock (2,621)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Oil prices rise more than 1% as Israel vows to...

      June 20, 2025
    • RRG Alert Tech Vaults to ‘Leading’—Is XLK Signaling a New...

      June 20, 2025
    • Apple looking to make ‘premium’-priced folding iPhones starting next year,...

      June 20, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,142)
    • Investing (538)
    • Stock (2,621)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Starbucks stock lacks a meaningful upside...

    December 21, 2022

    The Sell Put And Buy Call...

    April 16, 2023

    Should you buy Chinese tech stocks...

    December 28, 2022
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here