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Christmas sales to act as barometer for resilient Moonpig’s future performance

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Moonpig [LON:MOON] will publish its interim results next Tuesday (5th December). It’s been a year of ‘resilience’ for the FTSE250-listed e-card retailer and although it won’t be a record-breaker of a year, what investors should expect is continued, consolidated revenue growth – probably not more than 10% year-on-year – but given the current macroeconomic circumstances, any growth is good, and companies should grasp onto it as much as they can.

When The Armchair Trader last wrote about Moonpig in 2022, the London-based online greeting card and gifting platform was fretting about potential industrial action and weather delays in its critical pre-Christmas period.

When things played out, Moonpig was felt a lot more cheerful when the Christmas period got fully underway, with a more limited impact in the UK from industrial action at Royal Mail in the months leading up to Christmas 2022.

Following on from Christmas, the company had a good Valentine’s Day, expanding its range of cut flowers, performance which also rolled into Mothering Sunday where the company reported its largest ever week of sales in March.


Moonpig sells its products through its proprietary app and online, allowing customers to personalise cards and send a range of gifts. It also owns Red Letter Days and Buyagift brands in the UK and the Greetz brand in the Netherlands. Originally set up in 2000 by Dragon’s Den investor Nick Jenkins during the nuclear winter that followed the dot.com bubble bursting, Moonpig was initially funded through private investment and VC.

The company quickly jumped on the telecoms bandwagon, and as ‘phones and digital cameras became more sophisticated developed its products to allow customisation and personalisation. In 2007 the company was responsible for 90% of the greetings card market in the UK.

Nickyl Raithatha, chief executive officer for Moonpig said: “Over the past five years, our strategy has consistently emphasised delivering revenue growth through the existing customer base, and the share of revenue from existing customers increased year-on-year to 88.6% (FY22: 86.5%). We maintained our disciplined approach to new customer acquisition in which we ensure that payback periods stay within our framework. We aim to acquire high-quality, loyal customer cohorts that deliver lifetime value rather than pursuing short-term, transactional revenue.”

Moonpig has seen steady progress

Although the company hasn’t been reaching the stars in terms of revenue growth or profitability, it has been steady in 2023 and could still be bound for the Moon[pig] in 2024. Moonpig opened this week (27th November) at 184p. In September 2022 Berenberg bank rated Moonpig as a ‘Buy’ with a target price of 390p. Obviously this year Moonpig has got nowhere near that level – its shares have ranged between 102p and 191.4p over 52-weeks – but Berenberg still sees something in the greetings company and reconfirmed its ‘Buy’ rating in July, albeit with a more realistic 250p target price, which still gives in the banks’ opinion an upside of 35%.

The bank commended Moonpig’s management for not only delivering a range of greetings and birthday cards, but on its promises, hitting revenue guidance of GBP320m for 2023 and robust profitability. Jeffries also has Moonpig as a ‘Buy’ with a target price of 240p.

Over the year-to-date, Moonpig shares have grown by 62.1% and over one-year are up 17.2%. The shares did fall off a cliff last Christmas, falling as low as 106.8p but recovered through the springtime and looked like they were on the way to break through 190p earlier this month. That said, Moonpig is well off its IPO valuation of 350p. The company has a market capitalisation of GBP633m.

Bridgewise, the AI analytical stock-picking tool rates Moonpig as ‘Hold’. The analyst said: “Moonpig’s financial results from 1Q23 demonstrated decent performance, but will likely only help Moonpig remain on par with its peers. It is highly likely that the company will be mostly tethered to market performance and sector movements for the near term. Therefore, Moonpig received an overall score of 72, translating into a ‘Hold’ ranking.”

Moonpig is becoming more expensive per card, whether hard-pressed consumers will continue to flock to its websites and apps remains to be seen, or will they opt for the physical, buying a paper card whilst grocery shopping at the supermarket, or go full-digital and send a video message on WhatsApp? Christmas is around the corner which is a critical time for Moonpig and the post-Q423 results often act as the barometer for Moonpig’s future performance for the following year.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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