TPW (Temple and Webster, the online furniture retailer) is a good business.
Large TAM, shift to online much further to run (using the US penetration rate as a proxy), good NPS, good customer loyalty, as evidenced by the number of repeated purchases (which now outnumbers the first-time-customer metrics).
But, it stands out from the pack as very expensive, at the sector level, in a simple model of valuation relative to fundamentals (here forecast ROE)…
…even after accounting for the high level of forecast EPS growth (below is against the industry group).
TPW is a good growth stock. Just, we think, it’s probably in the price, for now.
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