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Farfetch Ltd Class A FTCH

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Morningstar’s Analysis

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Farfetch Continues to Benefit From COVID-19 Lockdowns, Strong Luxury Buying

Jelena Sokolova, CFA Senior Equity Analyst

Analyst Note

| Jelena Sokolova, CFA |

We increase our fair value estimate for no-moat Farfetch to USD 24.00 thanks to time value of money impact and higher expected growth in 2021 after strong first-quarter results. We believe that Farfetch’s revenue continues to be helped by lockdowns, in-store purchasing and travel restrictions in many geographies, and strong luxury demand backdrop, as luxury companies in our coverage are reporting first-quarter 2021 sales almost at 2019 or even in some cases (Hermes, LVMH’s fashion and leather division) significantly above 2019 levels. We expect this strong growth to normalize to high-/mid-teens in the post-pandemic years.

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Company Profile

Business Description

Farfetch is an online platform connecting sellers and buyers of personal luxury goods. It was founded in 2008. The company partners with over 1,000 luxury goods sellers to offer their inventory on the platform. When making the retailers' stock available to almost a million active customers, the company charges a cut of around 30% (third-party take rate). Geographically, Europe, the Middle East, and Africa account for 37% of the company’s sales, the Asia-Pacific 36%, and the Americas 27%. The company operates digital marketplace platform Farfetch, Browns stores and acquired branded company New Guard Group.

The Bower, 211 Old Street
London, EC1V 9NR, United Kingdom
T +44 2075495400
Sector Consumer Cyclical
Industry Internet Retail
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 5,441