Why is the Adore Beauty share price tumbling 9% to an all-time low?

Adore Beauty shares are suffering a painful drop today.

Key points
  • The Adore Beauty share price has sunk 9%
  • It just hit an all-time low since listing in October 2020
  • However, the business continues to report higher sales

The Adore Beauty Group Ltd (ASX: ABY) share price has dropped another 9% today. That means it has now fallen 64% over the last six months to an all-time low.

But the online beauty product retailer isn't the only one suffering today. Others in the ASX tech share space have also fallen.

For example, the Cettire Ltd (ASX: CTT) share price has fallen by 5.1%. And the Pointsbet Holdings Ltd (ASX: PBH) share price is down 2.5%.

A drag queen beauty looks grim despite looking fabulous.

Image source: Getty Images

What's happening to the Adore Beauty share price?

It has been a challenging period for ASX tech shares. Temple & Webster Group Ltd (ASX: TPW), Xero Limited (ASX: XRO) and Kogan.com Ltd (ASX: KGN) have all fallen since the start of 2022.

The last time the company updated the market was when it released its FY22 half-year result for the six months to 31 December 2021. Revenue increased 18% to $113.1 million for the half, which was a slower growth rate than previous COVID-affected periods.

However, Adore Beauty was optimistic when it told the market about its trading in the second half of the year and its outlook.

Adore Beauty said that it continues to benefit from the structural shift to online shopping. It said that it is positioned for future growth through a combination of new customer growth, high retention levels, and growing brand awareness.

In the first six weeks of FY22, Adore Beauty saw revenue increase 14% year on year. It's looking to "cement its market leadership position" and capture market share in a large and growing market.

There has been a lot of market focus on interest rate changes and inflation since the start of the year.

Could the company rebound?

UBS has a price target of $4.70 on the Adore Beauty share price. That implies a possible rise of more than 150% over the next 12 months.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Cettire Limited, Kogan.com ltd, Pointsbet Holdings Ltd, Temple & Webster Group Ltd, and Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns and has recommended Kogan.com ltd and Xero. The Motley Fool Australia has recommended Adore Beauty Group Limited, Cettire Limited, Pointsbet Holdings Ltd, and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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