Farfetch stock price is up over 60% in November. Here’s why

Farfetch stock price is up over 60% in November. Here’s why
Written by:
Michael Harris
15th November, 17:40
  • The company recorded $798 million in gross merchandise volume (GMV) for the third quarter
  • Farfetch agreed a new partnership with Alibaba and Richemont to create a “Luxury New Retail” platform
  • Farfetch stock price is up more than 300% since the beginning of this year

Farfetch (NYSE: FTCH) stock price has exploded this month to print record highs above the $50 mark. This way, shares are now up over 300% since the beginning of the year. 

Fundamental analysis: Sales soar

Farfetch, an online luxury fashion platform, posted a loss of $537 million to beat the market’s expectations for the third quarter. The company recorded $798 million in gross merchandise volume (GMV), which is by far the highest number reached in a single quarter so far. 

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“We believe we’re witnessing a paradigm shift in the way people buy luxury. From day one, Farfetch set out the differentiated vision to enable the luxury industry by building a full suite of capabilities to connect the creators, curators and consumers, who are the lifeblood of the luxury industry,” Jose Neves, the Founder, Co-Chairman & Chief Executive Officer of Farfetch, said.

A few days ago, Farfetch agreed a new partnership with Alibaba and Richemont to create a “Luxury New Retail” that will enable the company to have broader access to the Chinese market.

“This highly complementary partnership brings together some of the world’s leading luxury retail and technology platforms, representing another milestone in Alibaba’s strategy to meet the rapidly growing demand for luxury products in China,” said Daniel Zhang, Alibaba Group Chairman and Chief Executive. 

Following strong results recorded in the quarter and a new partnership, Credit Suisse’s Stephen Juefore hiked the price objective on Farfetch to $43 per share (up from $35).

Technical analysis: Shares up 300%

Farfetch stock price gained 5.69% on Friday to close at $45.67 despite reaching levels above the $50 mark on stronger-than-expected quarterly earnings. This way, shares of Farfetch closed the week 7.5% in the green just a week after exploding 51% last week.

Farfetch stock daily chart (TradingView)

The investing community witnessed a classic pullback fueled by profit-taking. Investors were glad to book some of their profits as FTCH is up more than 300% since the beginning of this year. Any deeper pullback to the $33 zone is likely to be seen as an opportunity to get on the long side. Learn how to choose winning stocks here.

Summary

Farfetch agreed a new partnership with Richemont and Alibaba to speed up the digitization of the luxury sector in China. A new platform coupled with a great performance in the last quarter propelled the stock to record highs this week.

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