LSE:AO.

Stock Analysis Report

Executive Summary

AO World plc, together with its subsidiaries, operates as an online retailer of domestic appliances and consumer electronics in the United Kingdom, Germany, and the Netherlands.

Snowflake

Fundamentals

Reasonable growth potential and slightly overvalued.


Similar Companies

Share Price & News

How has AO World's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-1.6%

AO.

6.5%

GB Online Retail

1.7%

GB Market


1 Year Return

-52.7%

AO.

7.1%

GB Online Retail

2.9%

GB Market

Return vs Industry: AO. underperformed the UK Online Retail industry which returned 7.1% over the past year.

Return vs Market: AO. underperformed the UK Market which returned 2.9% over the past year.


Shareholder returns

AO.IndustryMarket
7 Day-1.6%6.5%1.7%
30 Day-17.0%0.2%-0.7%
90 Day-11.4%12.4%-1.8%
1 Year-52.7%-52.7%7.6%7.1%8.0%2.9%
3 Year-63.4%-63.4%50.5%47.6%18.2%3.8%
5 Year-60.8%-60.8%150.8%139.8%35.6%6.1%

Price Volatility Vs. Market

How volatile is AO World's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is AO World undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: AO. (£0.66) is trading below our estimate of fair value (£1.74)

Significantly Undervalued: AO. is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AO. is unprofitable, so we can't compare its PE Ratio to the Online Retail industry average.

PE vs Market: AO. is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

Low PEG Ratio: Insufficient data to calculate AO.'s PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: AO. is overvalued based on its PB Ratio (3.5x) compared to the GB Online Retail industry average (3.5x).


Next Steps

Future Growth

How is AO World forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

104.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AO. is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.2%).

Earnings vs Market: AO. is forecast to become profitable over the next 3 year, which is considered above average market growth.

High Growth Earnings: AO.'s loss is forecast to worsen by 0% next year.

Revenue vs Market: AO.'s revenue (14% per year) is forecast to grow faster than the UK market (3.9% per year).

High Growth Revenue: AO.'s revenue (14% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: AO.'s Return on Equity is forecast to be low in 3 years time (0.9%).


Next Steps

Past Performance

How has AO World performed over the past 5 years?

-16.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: AO. is unprofitable, and losses have increased over the past 5 years at a rate of -16.5% per year.

Accelerating Growth: Unable to compare AO.'s earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: AO. is unprofitable, making it difficult to compare its past year earnings growth to the Online Retail industry (21.4%).


Return on Equity

High ROE: AO. has a negative Return on Equity (-19.63%), as it is currently unprofitable.


Return on Assets

ROA vs Industry: AO. is currently unprofitable, so its Return on Assets is negative.


Return on Capital Employed

ROCE Improving: AO. is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is AO World's financial position?


Financial Position Analysis

Short Term Liabilities: AO.'s short term assets (£223.8M) do not cover its short term liabilities (£251.2M)

Long Term Liabilities: AO.'s short term assets (223.8M) exceeds its long term liabilities (41.0M)


Debt to Equity History and Analysis

Debt Level: AO.'s debt to equity ratio (35%) is considered satisfactory

Reducing Debt: AO.'s debt to equity ratio has increased from 0.5% to 35% over the past 5 years.

Debt Coverage: AO.'s operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if AO.'s interest payments on its debt are well covered by EBIT.


Balance Sheet

Inventory Level: AO. has a high level of physical assets or inventory.

Debt Coverage by Assets: AO.'s debt is covered by short term assets (assets are 7.386130x debt).


Next Steps

Dividend

What is AO World's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.0%markettop25%5.4%industryaverage3.3%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate AO.'s dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate AO.'s dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if AO.'s dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if AO.'s dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of AO.'s dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

What is the CEO of AO World's salary, the management and board of directors tenure and is there insider trading?

5.0yrs

Average management tenure


CEO

John Roberts (45yo)

0.8yrs

Tenure

UK£509,223

Compensation

Mr. John Roberts founded AO World Plc in 2000 and has been its Executive Director since August 02, 2005. Mr. Roberts is responsible for innovation and inspiring AO’s people. Mr. Roberts served as the Chief ...


CEO Compensation Analysis

Compensation vs. Market: John has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the UK market.

Compensation vs Earnings: John's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

5.0yrs

Average Tenure

43yo

Average Age

Experienced Management: AO.'s management team is considered experienced (5 years average tenure).


Board Age and Tenure

3.3yrs

Average Tenure

56.5yo

Average Age

Experienced Board: AO.'s board of directors are considered experienced (3.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • John Roberts (45yo)

    Founder

    • Tenure: 0.8yrs
    • Compensation: UK£509.22k
  • David Ashwell (51yo)

    Managing Director of Expert Logistics

    • Tenure: 13.3yrs
  • Mark Higgins (41yo)

    Group CFO & Executive Director

    • Tenure: 4.2yrs
    • Compensation: UK£629.73k
  • Kevin Monk (37yo)

    Managing Director of AO Business UK

    • Tenure: 5.8yrs
  • Julie Finnemore

    Director of Group Legal & Company Secretary

    • Tenure: 0yrs
  • Danny Emmett

    Chief Operating Officer of UK

    • Tenure: 0yrs
  • Michael Bates

    Chief Brand and People Officer

    • Tenure: 0yrs
  • Robert Sant

    Managing Director of AO Recycling Ltd

    • Tenure: 0yrs
  • Mark Burrows-Smith

    Chief Executive Officer - Repic

    • Tenure: 0yrs

Board Members

  • Marisa Cassoni (68yo)

    Senior Independent Director

    • Tenure: 0.3yrs
    • Compensation: UK£60.27k
  • Geoff Cooper (65yo)

    Non-Executive Chairman

    • Tenure: 3.3yrs
    • Compensation: UK£166.24k
  • Luisa de Andrade Delgado (53yo)

    Non-Executive Director

    • Tenure: 0.8yrs
  • Chris Hopkinson (60yo)

    Non-Executive Director

    • Tenure: 13.8yrs
    • Compensation: UK£50.00k
  • John Roberts (45yo)

    Founder

    • Tenure: 0.8yrs
    • Compensation: UK£509.22k
  • Mark Higgins (41yo)

    Group CFO & Executive Director

    • Tenure: 4.2yrs
    • Compensation: UK£629.73k
  • Shaun McCabe

    Non-Executive Director

    • Tenure: 1.3yrs
    • Compensation: UK£34.30k

Company Information

AO World plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: AO World plc
  • Ticker: AO.
  • Exchange: LSE
  • Founded: 2000
  • Industry: Internet and Direct Marketing Retail
  • Sector: Retail
  • Market Cap: UK£310.499m
  • Shares outstanding: 471.88m
  • Website: https://www.ao-world.com

Number of Employees


Location

  • AO World plc
  • AO Park
  • 5A The Parklands
  • Bolton
  • Greater Manchester
  • BL6 4SD
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AO.LSE (London Stock Exchange)YesOrdinary SharesGBGBPFeb 2014
AOLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPFeb 2014
81ADB (Deutsche Boerse AG)YesOrdinary SharesDEEURFeb 2014
AOWD.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDFeb 2014

Biography

AO World plc, together with its subsidiaries, operates as an online retailer of domestic appliances and consumer electronics in the United Kingdom, Germany, and the Netherlands. It also provides logistics  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/17 21:15
End of Day Share Price2019/10/17 00:00
Earnings2019/03/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.