I understand where you are coming from but you have to...

I understand where you are coming from but you have to understand what Adore actually is and why it deserves such valuation in the first place by digging deeper. Many would actually argue that the stock is fairly cheap at $650m.

Adore Beauty is not directly comparable to Myer or Chemist Warehouse or Priceline. This is what Kate is referring to the male investors just not getting it. At the bottom of it, the business has spent 20 years building out its channels and network to become what it is today. You can do a simple search yourself at the product availability of Adore vs. say Myer. The competitors brand and product coverage just isn't there.

Adore's Brands A to C



Myer's Brands A to C



In addition to that, Adore has materially more products within each brand vs. Myer. For instance, Estee Lauder has 145 products on Adore vs. 74 products on Myer. You also have to understand what is trending and what the ladies are after in the current market. For instance, Adore has in stock the popular Skinceuticals brand which you can't find on Myer.

As for valuation, there is a reason why it can be marked at $650m market cap and get away in this market without even a touch of retail investor participation. You just can't use the old valuation metric to value a category leader, pure ecommerce company in today's market. It is very obvious that the direct comparable here is Temple and Webster, for which is trading on a trail EV/revenue multiple of 8x versus Adore's 4x. Both companies are category leaders, have enjoyed the same 3 year growth of 30%+ p.a. and achieve gross margins of just over 30%. Both companies have minimal EBITDA which will in theory exponentially grow from here as they all got large fixed cost base relatively to their current revenue.

You simply can't use traditional valuation metrics to value such company and the safer bet is to value it versus peers. Based on this, Adore appears to be significantly undervalued.