Small Cap Stocks Down Under 8 January 2021: Adore Beauty Group, Atomos, Coventry Group
Adore Beauty Group: Solid potential but the price needs a makeover
In today's edition of Small Cap Stocks Down Under, Melbourne-based Adore Beauty Group is an online retailer of third-party cosmetics and other beauty and personal care products. It is an emerging player in a $10.9bn Australian beauty and personal care market that has ample room for e-commerce penetration. Adore Beauty debuted on the ASX back on October 23rd with an IPO price of $6.75. Even with the shares having pulled back 20% since then, we find the price tag to be too high. The path to growth is clear given the ANZ region’s increased online spending patterns on personal care products. But considering the intensifying competition and low barriers to entry in the online beauty market, we believe Adore Beauty still has much to prove to justify its current valuation.
Also in today's edition, a look at video content software developer Atomos (ASX: AMS) and industrial product distributor Coventry Group (ASX: CYG).
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Click here to read the previous edition of Small Cap Stocks Down Under published 18 December 2020