Naked Wines PLC

Naked Wines PLC (LSE: WINE) is a UK-based, direct-to-consumer online wine retailer listed on the FTSE AIM All-Share Index. The Company operates through three primary segments: the United States, the United Kingdom, and Australia. Its product portfolio features a diverse range of wines, including best sellers, award-winning medals, sustainable and vegan-friendly options, and curated collections like sparkling wines and top-rated Riojas. This Report covers the Key Recommendation Rationale, Conclusion, and Recommendation on the stock.

Key Recommendation Rationale – Sell at GBX 79.00

• Continued Revenue Decline Raises Questions About Growth Trajectory: Despite the company's efforts to stabilise operations and improve its cost base, revenue fell by 14% year-on-year in FY25, following an 18% decline in FY24. While this is in line with management guidance, it may signal ongoing challenges in customer acquisition, retention, or broader demand. The lack of top-line growth could limit the company’s ability to scale and may constrain its medium-term ambitions if not addressed effectively.
• Pressure on Profitability Metrics Amid Strategic Adjustments - The adjusted EBITDA (excluding inventory liquidation and associated costs) declined to £6.7 mn in FY25 from £8.7 mn in the prior year, reflecting weaker underlying profitability. While cost actions and operational discipline are noted, the company remains reliant on inventory liquidation to drive cash generation. This could suggest that further progress is needed before core profitability is consistently sustainable without reliance on short-term levers.
• Customer Metrics Show Limited Improvement in Core KPIs - Key customer-related metrics such as Member Retention Rate (75%) and Customer Acquisition Cost (£74) remained largely flat or saw modest deterioration. Revenue per member also declined slightly by 2%, which may point to pressures in customer engagement or purchasing behaviour. With a redefined marketing strategy in place, expectations will likely shift toward demonstrating improvement in these foundational KPIs over the coming year.

Valuation Methodology: Price/ Earnings Approach

Share Price Chart  

WINE Daily Technical Chart, Source - Refinitiv 

Conclusion

WINE is expected to trade at a discount, considering Continued Revenue Decline and fears of global slowdown. For conducting the valuation, the following peers have been considered - Card Factory PLC (LSE: CARD), Ocado Group PLC (LSE: OCDO) and others.

Given its current trading levels, Pressure on Profitability Metrics Amid Strategic Adjustments, recent rally in the share price, relative valuation, and associated risks, it is prudent to exit the stock at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the Current Market Price of GBX 79.00 as of 22 October 2025 at 09:05 AM GMT+1.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 22 October 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and/or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.