After a 5-year slump, ASOS hit a 16-year low in Q4. But that is behind it. New leadership has transformed the business model, and major restructuring addresses low margins/ROCE. Cost actions mean EBITDA growth doesn’t yet require sales growth. But growth looks imminent as the turnaround enters a key final phase via a step-change in the UX and marketing, with scope for significant operating leverage. UK investors haven’t yet got on board but, with an improved outlook, lower risk profile, and a 2-stage recovery to equity value, we think it is time to revisit.
