It rates the shares, up 81% in the last year, ‘overweight’ and has set a bullish £66.30 target - more than ten quid higher than the current price.
Barclays said that after a “year of pain” in 2014, ASOS is back on track, although it concedes that currency movements have been a big, positive “swing factor” in the recent results.
“Whilst there are still execution risks, we are confident that the benefits of technology and warehouse spend have further to run and believe that ASOS can gain share at a faster rate than the market expects,” the bank said in a note to clients.
“We are also comforted that investor expectations on margins have rebased, and we don't think margin expansion is needed for the stock to go up: the value of the company is driven by the ability to build its moat today, which in turn flows into a conversation on midterm revenues and margins.”
At 10am, the stock was changing hands for £55.70, up 1.2%.
It says “expectations are high and stock looks expensive” on an enterprise multiple of 30-times and an eye-watering 51-times earnings.
“Can the momentum continue?” Barclays asked.
“We think Reuters consensus numbers could still move meaningfully higher in full-year 2018, and we do not yet think an upside case for earnings is fully reflected in the shares.
“Given outstanding recent execution, it is still too early to conclusively call an end to the positive estimate momentum trade.”
However, the bank’s retail analysts remain in a holding pattern with Boohoo pending guidance on the recent acquisition of US site Nasty Gal.
It will wait until the prelims on April 26 before re-evaluating its view on the stock.
The shares, up 274% in the past year, are currently changing hands for 153p each, valuing the business at £1.7bn.
ASOS is worth £4.7bn, which if the company wasn’t listed on the lighter-touch AIM market, qualify it for inclusion in the FTSE 100.