Here are 6 of the worst performing ASX shares. Will they bounce back in 2025?

6 of the worst performing ASX shares. Will they bounce back in 2025?

 

Imugene (ASX:IMU) down 65% in 2024

Imugene is an oncology biotech. It is still capped at over $250m but is well off all time highs. It has multiple cancer therapies that use CAR-T therapies. CAR-T is a therapeutic approach that utilises a body’s own immune system to fight cancer. It extracts T-cells from a patient’s blood and then genetically engineers them to produce Chimeric Antigen Receptors on their surface which directs a T-cell response to that specific cancer antigen.

All 3 of Imugene’s assets have clinical data, extensive patent protection lasting well into the 2030s and Investigational New Drug Status from the FDA. The company is hoping to enter Phase 2 with all 3 of them in the next couple of years. On that basis, you might conclude it will bounce back if it executes, but this is no certainty. Moreover, you could argue that even its current valuation isn’t befitting of its current status – fellow ASX biotech Dimerix is capped at under $200m and it is at Phase 3 for crying out loud.

 

Star (ASX:SGR) down 63% in 2024

At this point, many investors should just be happy that their investment has not been wiped out, because it has shaken off death a number of times. The glory days of the pandemic, buoyed by high-rollers from China, are never coming back. Even if the pandemic never happened, Star was set to face competition from the nearby Crown Casino, but perhaps they could’ve co-existed. Especially because Crown was at the time being dragged through several inquiries. Its revenue has continue to stagnate, it has had multiple turnovers at a board level and it took such a long time to publish its most recent annual report.

As we’ve said before, in absence of some kind of M&A deal however, it is difficult to see a realistic catalyst that would lead to the company reaching pre-pandemic levels again.

 

Cettire (ASX:CTT) down 61% in 2024

Cettire is an e-commerce outlet with a focus on high-end fashion. For a number of years it could do no wrong – except its CEO continually selling shares, but investors were forgiving because there was nothing else to fault. Things came to a head in March whe nthe AFR published an investigation that revealed duties charged by Cettire on goods may not have been paid to the federal government. Investors sold off the stock, unsure whether this was a legal part of the business model, or something that could get it into trouble.

Yesterday (June 24), shares nearly halved in a day after a company update. There was some good news, including the launch of its platform in China, and strong active customer, sales revenue and EBITDA growth in FY24. Revenue is FY24 was expected to be 77-79% ahead of FY23, and EBITDA 24-36%.

But…revenue and EBITDA were both behind consensus of $750m and $44.1m respectively. And go to the second page of the announcement, and there was some bad news. ‘Since our market update in mid-April, however, we have observed more challenging market conditions,’ the company said.

The reality is that eCommerce tends to be a bad business to be in, with low margins. As Amazon has shown, the best way to succeed is to be a monopolist by outperforming all your competitors in service and price. But the fact that even Amazon is no longer a pureplay eCommerce company, relying on AWS and services offered with its Prime membership, illustrates the reality of eCommerce even further. It is hard to see Cettire recovering unless it records unexpectedly stellar top and bottom line growth.

 

Liontown (ASX:LTR) down 47% in 2024

Liontown is Australia’s newest lithium producer. It found the Kathleen Valley deposit in 2016 and built it up into the newest lithium mine in Australia. Unfortunately, it timed its commencement of production poorly, at a time of collapsed lithium prices.

Kathleen Valley does look good. It has a current Mineral Resource Estimate of 156Mt at 1.4% lithium and could produce over 500ktpa over a 23-year life of mine. Over 80% of this is Measured or Indicated. The project’s economics, outlined in the 2021 DFS include an NPV of A$4.2bn and a 57% IRR after tax.

But fallen lithium prices have put a dent in its hopes and the hopes of many other ASX lithium stocks. A $6.6bn takeover bid from Albemarle fell through, a $760m debt financing package that had been signed and sealed was withdrawn 3 months later, and substantial cost inflation meat multiple capex upgrades (a more than tripling of costs in 3 years).

Despite starting production, which is a fair feat considering so many other ASX-listed battery metals companies have had to halt production or even go into administration, the company’s CEO Tony Ottaviano has admitted that it won’t be producing forever at these prices. Don’t take our word, take the boss’ word. The potential for Liontown to recover depends on where lithium prices go.

 

Dominos (ASX:DMP) down 39% in 2024

Dominos Pizza Enterprises (ASX:DMP) is not the Domino’s parent company, but the master franchisor of Dominos in roughly a dozen countries: Australia, New Zealand, France, Germany, the Netherlands, Belgium, Luxembourg, Taiwan, Japan, Malaysia, Singapore and Cambodia. It has been a growth story, seeking to expand its footprint into these countries in the hope that pizza could prove itself better than other fast-food option, and that Dominos could beat its peers in terms of convenience, value for money, product options and pricing. ‘

As people remerged form their cocoons, inflation skyrocketed and Dominos saw sales flatline as people pivoted to cheaper options. High inflation on ingredients and unfavourable forex movements compounded the hit to the company’s bottom line. To say it has been an ugly couple of years for the share price is an understatement.

The company has abandoned its formal ‘7,100 stores by 2033’ target and bid farewell to long-term CEO Don Meij recently. Unlike other stocks on this list, we are optimistic that shares may be able to make up some lost ground in 2025. The company has been gradually improving its top and bottom lines, but needed a circuit breaker to prove to investors things were turning around, and we think Meij’s departure will be it.

 

Boss Energy (ASX:BOE) down 35% in 2024

Boss Energy owns the Honeymoon Uranium project in South Australia. Like lithium, uranium prices have suffered in 2024. But unlike lithium, it has only been a temporary dip to levels in 2021 as opposed to all time lows in the 2010s. Many uranium companies on the ASX have projects that have been mothballed for some years but are ready to restart production – needing only the right pricing levels. We see high demand for nuclear energy in the future and we think the overall direction of uranium prices since the pandemic reflects this.

Boss is about to recommence production at Honeymoon. Honeymoon could produce over 20Mlb over its life for a US$309 million NPV. Moreover, the company has over A$100m in cash as well as existing inventory to support ramp-up of sales as production gradually ramps up.

 

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