Moonpig (LSE:MOON) stood out in the FTSE 250 today (25 June), flying 10.7% higher to 248p. This brings the year-to-date gains to around 23%, easily beating the mid-cap index (+3.2%).
I had an inkling this might happen after digging into the company in December. Back then, I had just used the Moonpig app to create a personalised, AI-enhanced Christmas card for my daughter. I was impressed with the tech firm’s customer proposition.
Since then, I have highlighted Moonpig almost every month. But I’m still bullish on the stock moving forward, despite the higher share price. Here’s why.
Pigs might fly
As a quick reminder, Moonpig is the leading online greetings card company in the UK and Netherlands (via the Greetz brand). Customers can personalise cards, add AI-generated stickers, create voice and video messages, and send gifts and flowers.
Today, the company released its results for the 12 months to 30 April (FY26). And despite the endless, grinding cost-of-living crisis, the numbers were solid:
- Revenue up 6.5% to £373m, with the flagship Moonpig brand growing at 8.6%.
- Adjusted pre-tax profit rose 13.4% to £76.5m, beating market consensus.
- Adjusted earnings per share (EPS) growth of 19.5%.
- Free Cash Flow increased 11.2% to £73.5m.
- Total dividend hiked 25%.
One crucial differentiator for Moonpig is its data advantage. Every time a new customer buys a card for a birthday or anniversary, the database of customer reminders grows.
Last year, this increased 11.2% to 113m, with around 40% of orders placed within seven days of Moonpig/Greetz giving them a reminder. Add in the subscription service, which increased by 29.3% to 1.2m members, and there’s a high degree of customer loyalty here.
Another thing I like is the popularity of creative features, including AI stickers (where the tool generates a custom image for your card). These were added to 31m greeting cards during the year, up 102%.
Of course, AI lowers the barriers to content creation for everyone. But not every firm has extensive fulfilment capabilities, a trusted brand, and a dataset of 113m customer reminders.
Every day, millions of customers trust us with some of life’s most important moments, from birthdays and anniversaries to celebrations…In a world increasingly shaped by technology and artificial intelligence, the human connections we help create feel more important than ever.
CEO Catherine Faiers.
What worries me?
The year wasn’t perfect, however. One slightly disappointing thing for me was that active customers only grew 2.8% to 12.3m.
Are more inflation-weary people cutting back on card buying in general? If so, this could become a near-term threat to growth.
Meanwhile, Greetz grew revenue by 1.5% in constant currency, suggesting it’s struggling to find growth momentum compared to the UK business.
That said, the Moonpig brand is seeing growth in new markets (+33%), including in Ireland, Australia, and the US.
My takeaway
The stock’s still trading reasonably, at around 13 times forward earnings. And Moonpig plans to acquire £65m worth of its own shares this year, after last year’s £62m buyback, which should help boost the key EPS metric.
Looking ahead, I remain bullish. There’s a structural shift taking place in card buying, from offline to online, and Moonpig is leading the way with a large and loyal customer base.
I reckon the shares are still worth considering.
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Ben McPoland has no position in any of the companies mentioned.
