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The Moonpig Group (LSE:MOON) share worth was up over 6% by early afternoon at the moment (17 September) after the web playing cards and gifting group issued its newest buying and selling replace forward of its annual normal assembly.
The magnitude of this modification doesn’t shock me. Because the desk beneath reveals, most of the time, at any time when the group pronounces its outcomes or offers the market a progress report, its share worth strikes considerably (up and down).
| Date | Announcement | Share worth motion (%) |
|---|---|---|
| 26 June 2025 | FY25 last outcomes | -9.2 |
| 3 April 2025 | Buying and selling replace | +1.8 |
| 10 December 2024 | HY25 outcomes | -14.6 |
| 14 March 2024 | Buying and selling replace | -3.3 |
| 27 June 2023 | FY24 last outcomes | +15.2 |
| 5 December 2023 | HY24 outcomes | -10.2 |
| 29 June 2023 | FY23 last outcomes | +4.0 |
| 30 March 2023 | Buying and selling replace | +10.7 |
A optimistic outlook
Right now, traders had been advised that the group, which operates within the UK and the Netherlands, was on target to ship earnings for the yr ending 30 April 2026 (FY26) consistent with expectations.
It says it continues to ship fixed income development of roughly 10% a yr. And adjusted EBITDA (earnings earlier than curiosity, tax, depreciation, and amortisation) is anticipated to develop at a “mid-single digit share charge”.
Extra importantly, adjusted earnings per share (EPS) is forecast to develop by 8%-12%. Throughout FY25, it reported EPS of 15p. If the group’s prediction is true, this implies EPS for FY26 might be between 16.2p and 18p, implying a price-to-earnings ratio of 11.7-13. In my view, anyplace inside this vary appears affordable for a high-margin internet-based enterprise.
| Monetary yr | Income (£m) | Adjusted fundamental earnings per share (pence) |
|---|---|---|
| 2025 | 350.1 | 15.0 |
| 2024 | 341.1 | 12.7 |
| 2023 | 320.1 | 13.1 |
| 2022 | 304.3 | 9.3 |
| 2021 | 368.2 | 6.1 |
The group’s sturdy money movement means it’s lately began paying a dividend. And it’s been repurchasing its personal shares.
A lot of its progress has been attributed to clients “embracing our progressive personalisation options to specific themselves, with adoption persevering with to rise — round 50% of all playing cards now together with choices resembling AI-generated stickers, audio or video messages, or personalised handwriting”.
All in all, the group seems to be in good condition.
Professionals and cons
However for the reason that pandemic, its share worth has been in decline. After which there’s the volatility famous above. The inventory has a five-year beta worth of 1.25. This implies if the market strikes by 10% (up or down) then, on common, the Moonpig share worth will change by 25%. That is unlikely to attraction to cautious traders.
Nevertheless, analysts seem to have purchased in to the expansion story. The common of their 12-month worth targets is 310p — even after at the moment’s bounce, that is 47% increased than the present worth.
And whereas I do have some doubts as as to whether the group’s actions might be simply replicated by others, it has a protracted monitor report of EPS development. The group claims that solely 15% of card purchases are made on-line so there’s loads of scope to broaden additional.
Its online-only enterprise mannequin means it has a decrease value base than its excessive avenue opponents. And it should be good at what it does as a result of over 90% of its enterprise comes from repeat clients.
For these causes, I feel Moonpig Group shares are worthy of consideration. However anybody taking a place must be braced for some fairly massive share worth swings at any time when it releases its outcomes or points a buying and selling replace.
