AO World (AO) AI Stock Analysis

• Market Cap: £565.03M
• Dividend Yield: N/A
• Average Volume (3M): 212.41K
• Price to Earnings (P/E): 21.0
• Beta (1Y): 1.06
• Revenue Growth: -0.39%
• EPS Growth: 2.68%
• Country: UK
• Employees: 2,834
• Sector: Consumer Cyclical
• Sector Strength: 49
• Industry: Retail - Discretionary
• EPS (TTM): 0.05
• Shares Outstanding: 580,303,470
• 10 Day Avg. Volume: 217,204
• 30 Day Avg. Volume: 212,406
• PEG Ratio: 7.85
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.54
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

AO World's stock score reflects solid financial performance with improved profitability and cash flow management, but declining revenue and asset base are concerns. The stock's technical indicators show a lack of momentum, and its valuation is moderate without a dividend yield. The absence of recent earnings call insights and corporate events means these factors do not impact the score.

AO World Business Overview & Revenue Model

Company Description

AO World (AO) is a leading online retailer specializing in the sale of electrical appliances and consumer electronics. Operating primarily in the United Kingdom and Germany, AO offers a wide range of products, including kitchen appliances, entertainment systems, and computing devices. The company is known for its customer-centric approach, providing comprehensive delivery and installation services, and maintaining a robust online platform to facilitate convenient shopping experiences.

How the Company Makes Money

AO World generates revenue through the online sale of electrical appliances and consumer electronics. The company's primary revenue stream is the direct sale of these products via its e-commerce platforms in the UK and Germany. Additionally, AO offers ancillary services such as product delivery, installation, and recycling of old appliances, which contribute to its revenue. The company also partners with various manufacturers and suppliers to ensure a wide product range and competitive pricing. AO's business model emphasizes enhancing customer satisfaction through efficient logistics and exceptional service, which helps drive repeat business and customer loyalty.

AO World Financial Statement Overview

Summary

AO World has improved profitability metrics with a positive net profit margin and robust cash flow generation. However, declining revenue and reduced assets present challenges for future growth.

Income Statement

AO World has shown improvement in profitability metrics over the years. The gross profit margin of 23.41% for the last annual period indicates efficient cost management. The net profit margin has recovered to 2.38% from a negative margin in the prior year, signaling a return to profitability. This is supported by a positive EBIT margin of 3.48% and an EBITDA margin of 6.25%. However, revenue has declined over the past three years, with a revenue decrease of 8.71% year-over-year. This declining revenue trend poses a risk to sustained profitability growth.

Balance Sheet

The balance sheet shows a solid capital structure with a debt-to-equity ratio of 0.51, suggesting moderate leverage. Return on equity (ROE) has improved significantly to 17.92%, reflecting effective utilization of equity to generate profits. The equity ratio stands at 31.20%, indicating a stable proportion of equity financing. However, the company's total assets have decreased, which might affect future expansion capabilities.

Cash Flow

Cash flow analysis reveals a strong operating cash flow to net income ratio of 2.49, indicating robust cash generation relative to reported profits. Free cash flow has increased significantly, with a growth rate of 140.09% year-over-year, showcasing improved cash efficiency. The free cash flow to net income ratio is 2.16, which is favorable. These metrics highlight the company's robust cash flow management, although past volatility in operating cash flow remains a concern.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
1.35B	1.04B	1.14B	1.56B	1.66B	1.05B
	Gross Profit
320.35M	243.30M	238.30M	269.40M	292.50M	178.30M
	EBIT
63.25M	36.20M	12.50M	-32.30M	29.70M	-3.80M
	EBITDA
117.55M	65.00M	44.50M	23.70M	51.10M	26.90M
	Net Income Common Stockholders
34.15M	24.70M	-2.60M	-30.40M	17.70M	1.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
40.10M	40.10M	19.10M	19.50M	67.10M	6.90M
	Total Assets
441.80M	441.80M	460.30M	549.20M	615.70M	449.00M
	Total Debt
70.90M	70.90M	95.30M	153.60M	95.30M	106.00M
	Net Debt
30.80M	30.80M	76.20M	134.10M	28.20M	99.10M
	Total Liabilities
304.00M	304.00M	354.60M	476.80M	519.30M	369.30M
	Stockholders Equity
137.80M	137.80M	105.70M	73.40M	97.70M	80.70M
Cash Flow		Free Cash Flow
75.00M	53.30M	22.20M	-62.00M	105.50M	6.10M
	Operating Cash Flow
84.35M	61.60M	24.40M	-52.40M	114.60M	14.10M
	Investing Cash Flow
-11.55M	-7.60M	7.70M	-9.60M	-9.10M	-7.90M
	Financing Cash Flow
-43.25M	-33.00M	-32.30M	14.40M	-45.30M	-28.20M

AO World Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 96.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:AO, the sentiment is Negative. The current price of 96.7 is below the 20-day moving average (MA) of 97.89, below the 50-day MA of 98.54, and below the 200-day MA of 106.86, indicating a bearish trend. The MACD of -0.62 indicates Negative momentum. The RSI at 44.64 is Neutral, neither overbought nor oversold. The STOCH value of 56.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:AO.

AO World Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CURY	73 Outperform	£1.01B	5.05	2.95%	―	-10.46%	396.13%
SMWH	69 Neutral	£1.36B	20.68	20.52%	3.18%	6.97%	-14.59%
AO	66 Neutral	£565.03M	21.02	20.28%	―	-0.39%	2.68%
MKS	65 Neutral	£6.75B	13.23	17.19%	0.90%	6.87%	22.36%
SBRY	60 Neutral	£5.49B	40.14	2.25%	5.51%	2.66%	80.49%
Sector *	59 Neutral	$12.37B	11.05	1.62%	3.72%	1.33%	-19.92%