Cettire Ltd (ASX: CTT) shares were hammered last week.
Investors were hitting the sell button after the ASX tech share released its disappointing full year results.
The online luxury products retailer reported an 81% increase in gross revenue to $978.3 million but a 34% decline in net profit after tax to $10.5 million. This profit decline was driven partly by paid customer acquisition expenses, which increased to 9.5% of sales revenue from 8% in FY 2023.
Also spooking investors was management warning that the global luxury sector has continued to experience softer trading conditions in FY 2025. This has seen increased promotional activity.
Following last week's decline, Cettire's shares are now down 64% since the start of the year. They are also down almost 80% from the 52-week high they reached in February.
While this is disappointing, analysts at Bell Potter think that it has created a buying opportunity for investors with a high tolerance for risk.
Bell Potter says this ASX tech share can double in value
According to a note, Bell Potter has responded to Cettire's full year results by retaining its speculative buy rating on the company's shares with a heavily reduced price target of $2.00 (from $2.60).
Based on its current share price of $1.05, this implies potential upside of 90% for investors over the next 12 months.
Bell Potter notes that it has downgraded its revenue and earnings estimates to reflect the company's results release. It said:
We make downward revisions to our revenue/earnings to incorporate 4Q24 variances and slower than expected growth in emerging markets. We forecast 17.5% net revenue growth in 1H25 (prev. +18.5%) given the tough 2Q25 ahead however an improved +27% in 2H (prev. +32%). We also factor in some variability in delivered margins through the year with our expectations for margins to improve (18.6% in 1H and 19.7% in 2H) as conditions improve towards the back end of CY24.
Along with these changes together with a lower marketing investment towards the mid-point of the company target range, our Adjusted EBITDA margin assumptions sit at 3.1% in 1H, thereafter improving to 4.0% in 2H (prev. 3.7% and 4.6% resp.). The net result sees our NPAT forecasts -17%/-15%/-16% for FY25/26/27e.
Remaining bullish
Despite the above, the broker remains very positive on this ASX tech share and sees it as a great time to buy (if you have a high tolerance for risk). It concludes:
We continue to see plenty of upside in revenue/earnings from 3Q25 onwards considering overall improving demand conditions and benefits in CTT's lean business model, however with a higher near term risk profile priced into the name at current levels. Given the uncertainties ahead as the company resolves audit issues, we rate the stock as Speculative Buy.
