ASOS Plc (LON:ASC) Analysts Are Cutting Their Estimates: Here's What You Need To Know

ASOS Plc (LON:ASC) missed earnings with its latest yearly results, disappointing overly-optimistic forecasters. It was a pretty negative result overall, with revenues of UK£2.9b missing analyst predictions by 4.5%. Worse, the business reported a statutory loss of UK£2.84 per share, much larger than the analysts had forecast prior to the result. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for ASOS

After the latest results, the consensus from ASOS' 15 analysts is for revenues of UK£2.79b in 2025, which would reflect a noticeable 3.9% decline in revenue compared to the last year of performance. Losses are predicted to fall substantially, shrinking 79% to UK£0.61. Before this earnings announcement, the analysts had been modelling revenues of UK£3.09b and losses of UK£0.56 per share in 2025. Overall it looks as though the analysts are negative in this update. Although revenue forecasts held steady, the consensus also made a moderate increase in to its losses per share forecasts.

The average price target fell 9.1% to UK£4.31, implicitly signalling that lower earnings per share are a leading indicator for ASOS' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic ASOS analyst has a price target of UK£7.90 per share, while the most pessimistic values it at UK£2.32. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 3.9% annualised decline to the end of 2025. That is a notable change from historical growth of 1.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.3% per year. It's pretty clear that ASOS' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on ASOS. Long-term earnings power is much more important than next year's profits. We have forecasts for ASOS going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with ASOS , and understanding it should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.