Up 480% in a year: Is it too late to invest in Cettire (ASX:CTT) shares?

The Cettire Ltd (ASX: CTT) share price has surged 480% over the past year. But is it now too late to invest?

Cettire shares were actually up even more in mid-November 2021 when it reached $4.75. It has declined by approximately 33% since then.

What does Cettire do?

Readers may not be familiar with this business. It isn’t really a household name yet.

Cettire is an e-commerce business which sells a very wide range of luxury personal goods. It has over 200,000 products of clothing, shoes bags and accessories from around 1,700 luxury brands. It describes itself as a global retailer.

How fast is it growing?

In FY21, Cettire delivered growth that it called “exceptional”, which significantly outperformed both the FY21 prospectus forecast and upgraded guidance.

The e-commerce ASX share reported that sales revenue rose by 304% to $92.4 million. The increase was 352% in constant currency terms.

Active customers rapidly increased, with growth of 285% to 114,830. More customers are coming back. In FY21, 40% of gross revenue was from repeat customers (up from 26% in FY20).

Profitability was higher than expected. The adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was $2.1 million, whilst the statutory net loss was just $0.3 million. It managed to generate $12.7 million of positive operating cashflow thanks to its capital-light model.

Is it too late to invest for growth?

Cettire’s management certainly don’t think that the growth has finished. With the release of the FY21 result, the founder and CEO Dean Mintz said:

There is a significant market penetration opportunity ahead for Cettire. A key objective in pursuing our initial public offering (IPO) was to unlock new and incremental growth opportunities…Our number one priority is to maximise the global revenue potential of the company by taking a long-term view. We will continue to invest in opportunities aligned to our strategy, with a near-term focus on customer acquisition, technology enhancements and building organisational capability.

Our focus in FY22 is on continuing to enhance our customer proposition, centred around our vast range of luxury products, value and rapid fulfilment, all of which are enabled by our deep and diverse supply chain and world class, proprietary technology.

Triple digit growth has continued into FY22. For the four months to 31 October 2021, sales revenue was up 172% to $57.8 million, active customers increase 220% to 158,260 and the number of orders rose 209%.

October monthly traffic was up 379% year on year and Cettire said it’s seeing very positive early signs from the migration to its proprietary storefront, with sales growth in “migrated” markets outpacing the company’s other markets.

Cettire share price snapshot

With Cettire shares dropping by a third since the middle of November, the company’s market capitalisation is now $1.2 billion according to the ASX.

The post Up 480% in a year: Is it too late to invest in Cettire (ASX:CTT) shares? appeared first on The Motley Fool Australia.

More reading

• Can you guess the best and worst All Ordinaries performers of 2021?
• These are the 5 best performing ASX shares of 2021
• Why is the Cettire (ASX:CTT) share price sinking 10% today?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Cettire Limited. The Motley Fool Australia has recommended Cettire Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3zORqe2