Cettire Limited

CTT Details

Robust Q3 FY22 Performance: Cettire Limited (ASX: CTT) operates an online luxury goods retail business in Australia. CTT offers personal luxury products through its website with access to a catalog of 1700 luxury brands. The company records a growth of 178% in gross revenue from $25.3 million as of Q3-FY21 to $70.2 million as of Q3-FY22.

Quarterly Performance, Source: Analysis by Kalkine Group

Key Risks: The company is exposed to risks related to low conversion ratio, which has further declined over the period. Moreover, the company is battered by a declining average order value, and risks arising from instability in demand and supply.

Outlook: Strong revenue growth and surge in website visits provide clarity on CTT’s growth strategy after the new mobile app launch. Eventually, CTT can enhance customer and brand experience by using its proprietary technology platform, and the metrics reported by company support this argument.

Stock Recommendation: The stock is currently trading near to its 52-week low level of $0.45, offering a decent opportunity for accumulation. The stock has been corrected by ~43.95% in the past one month. The stock has an EV/Sales multiple of 0.8x against the industry median (Consumer Cyclicals) of 1.4x on a TTM basis. Thus, it seems that the stock is undervalued at the current trading levels. Considering the valuation on a TTM basis, rising revenue, a growing number of orders and active customers, decent long-term outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.505 as on 19 May 2022, 10:30 AM (GMT+10), Sydney, Eastern Australia.

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

CTT Daily Technical Chart, Data Source: REFINITIV 

Note 1: The reference data in this report has been partly sourced from REFINITIV

Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock price

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