Farfetch Posts Smaller-Than-Feared 4Q Loss; Partners With Aurora Mobile

Farfetch Lt. reported stronger-than-expected 4Q results, driven by double-digit growth in gross merchandise value (GMV) and digital platform GMV. Shares of the luxury goods online marketplace provider closed 3.2% higher on Friday.

Farfetch (FTCH) posted a net loss of $0.06 per share, which was much smaller than analysts’ expectations of a net loss of $0.34 per share.

Revenue increased 41% year-over-year to hit $540 million, topping analysts’ estimates of $518.06 million. Order growth and new customer acquisition, helped the company’s GMV increase year-over-year by about 43% to $1.06 billion in 4Q. Digital platform GMV jumped by about 49% to $939.4 million during the same comparative period.

Farfetch CEO Jose Neves said, “2020 put the Farfetch platform to the test, but thanks to our robust capabilities, resilient operations and utmost perseverance from our more than 5,000 Farfetchers, we rose to the challenge and enabled our nearly 1,400 Marketplace sellers and Farfetch Platform Solutions clients to continually serve millions of luxury consumers across the globe.”

For 1Q, Farfetch estimates digital platform GMV to be in the range of $740 million to $770 million. For fiscal 2021, digital platform GMV is expected to be in the range of $3.6 billion to $3.7 billion, a year-over-year growth of 30% to 35%. (See Farfetch stock analysis on TipRanks)

Additionally, Farfetch also announced a partnership with China-based Aurora Mobile. Under this collaboration, Aurora will deploy its artificial intelligence and machine learning capabilities to help Farfetch personalize customers’ retail experiences and to provide targeted services.

Earlier on Feb. 26, Oppenheimer analyst Jason Helfstein raised the stock’s price target to $65 (1.3% downside potential) from $52 and reiterated a Buy rating. Helfstein sees, “continued momentum in the secular shift of luxury to online channels.”

Turning now to the rest of the Wall Street community, Farfetch has a Strong Buy consensus rating based on 8 Buys and 1 Hold. The average analyst price target of $70.67 implies about 7.3% upside from current levels. Shares have skyrocketed about 490% over the past 12 months.

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