Moonpig (LSE:MOON) is a FTSE 250 stock that currently costs 217p. However, one analyst team (Jefferies) reiterated its 315p price target on Moonpig yesterday (8 June).
If this target is achieved by next year, it would represent a 45% gain from today’s price. And that would no doubt be welcome relief for investors who bought the stock above 400p soon after the 2021 IPO.
But what do other analysts think about Moonpig?
Nearly 10 out of 10
According to my data provider, there are 10 City brokers following the online greetings card and gifting company. And an impressive nine of these rate the stock as a Buy today, with one lone dissenter saying Hold.
The average price target is 297%, which is 36.6% higher than the present level. Noticeably, not a single one has a projection that is lower than 217p, suggesting that this FTSE 250 share is undervalued.
Indeed, one Moonpig bull has a 335p price target — over 50% higher!
What do they see here?
Having dug into the stock a while back, I can see why these analysts are impressed. I think there are a number of things to like here.
For a start, Moonpig is the UK’s leading online greeting card company, with a 70% market share (nearly six times larger than its nearest rival). It also owns the Greetz brand in the Netherlands (65% share), with over 12m active customers in total.
Despite e-commerce being entrenched in the UK, only 6% of cards by volume are bought online today. But Moonpig has a far better offering than stores, in my opinion, as you can personalise the cards by adding photos, voice messages, and gifts.
Over time, I see no reason why the majority of cards won’t be bought online, due to convenience and greater choice. And this present a large, multi-year market opportunity for a category leader.
Here are some other reasons why I like Moonpig:
- Asset-light platform company (high profitability and strong cash generation).
- Loyal customers (nearly 90% of revenue from existing customers).
- Revenue in new markets (Ireland, Australia and the US) grew by 32.3% in H1 FY26.
- Massive data advantage (over 107m reminders to drive repeat purchases).
- Applying AI to this proprietary data to personalise the customer experience.
- Over 1m subscriptions to Moonpig Plus and Greetz Plus.
- Just completed a £60m share buyback.
- Forward dividend yield of 2%, with lots of scope to increase payouts.
Low barriers to entry
Naturally, no stock is perfect and there a couple of negatives worth mentioning here. One is Moonpig’s experience gifting business, which continues to underperform.
Revenue here declined 8.9% in H1, acting as a bit of a drag on the wider group.
Meanwhile, Card Factory has been beefing up its own online personalised card offerings, including buying Funky Pigeon last year for £24m. So Moonpig does face some competition in this space (where barriers to entry are low).
What about valuation?
Turning to valuation, though, the stock looks reasonably priced to me. Earnings per share are growing by double digits, putting the forward price-to-earnings multiple at 11.5, and the price/earnings-to-growth (PEG) ratio at 0.9.
Weighing everything up, I think Moonpig stock is worth considering today at 217p. I can see it heading higher in future as card buying continues to go digital.
Should you invest £5,000 in Moonpig Group Plc right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Moonpig Group Plc made the list?
Ben McPoland has no position in any of the companies mentioned.
