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What To Expect From Farfetch’s (FTCH) Q1 Earnings


Jabin Bastian /
2022/05/25 7:40 am EDT
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Online luxury marketplace Farfetch (NYSE: FTCH) will be announcing earnings results tomorrow after market close. Here's what you need to know.

Last quarter Farfetch reported revenues of $665.6 million, up 23.2% year on year, missing analyst expectations by 1.13%. While the stock traded up on the results, it was still a weaker quarter for the company, with a miss of the top line analyst estimates. The company reported 3.68 million active buyers, up 21.9% year on year.

Is Farfetch buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Farfetch's revenue to grow 15.8% year on year to $561.8 million, slowing down from the 46.3% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.21 per share.

Farfetch Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing four downward revisions over the last thirty days. The company missed Wall St's revenue estimates twice over the last two years.

Looking at Farfetch's peers in the online marketplace segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Airbnb delivered top-line growth of 70.1% year on year, beating analyst estimates by 3.88% and The RealReal reported revenues up 48.4% year on year, exceeding estimates by 7.59%. Airbnb traded up 5.49% on the results, and The RealReal was up 9.52%. Read our full analysis of Airbnb's results here and The RealReal's results here.

The fears around raising interest rates have been putting pressure on tech stocks and online marketplace stocks have been swept alongside with it, with share price down on average 29.4% over the last month. Farfetch is down 40% during the same time, and is heading into the earnings with analyst price target of $29.67, compared to share price of $6.83.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.