Moonpig Shares Have ‘Attractive Underlying Value’ Argues Analyst

Moonpig (LON: MOON) shares continue to offer “attractive underlying value” despite a challenging consumer and geopolitical backdrop, according to a new research note from Edison's head of technology, Dan Ridsdale.

In a recent trading update, Moonpig said it expects full-year FY25 revenue of £350–353 million, just shy of the £356 million consensus, and adjusted EBITDA margins at the top end of its 25–27% guidance. 

The company also announced a new £60 million share buyback and reiterated its medium-term goal of achieving mid-teens growth in adjusted EPS.

Reacting to the update, Edison highlighted the resilience of Moonpig’s business model and its strong cash generation. 

“While disruptive, the group’s business model continues to prove robust and therefore significant growth opportunities remain,” Ridsdale said when writing about the “House Stock”.

Moonpig’s strategy is centred on increasing its 11.5 million active customer base and boosting purchase frequency, currently at 3.6 cards per year, closer to the offline market average of 19.4. 

The company is also working to raise its gift attachment rate from 17.3%, capitalising on the fact that 58% of card-giving occasions involve a gift.

The group is targeting further growth through upselling experiences, international expansion, and third-party partnerships.

Edison estimates Moonpig’s return on capital (excluding goodwill) at 180–200%, far exceeding its estimated 5% cost of capital, suggesting a compelling investment case despite a slight valuation premium to peers.

“Its modest capital base generates high returns, which suggests attractive underlying value in the shares,” the firm stated.