About two-thirds of my Stocks and Shares ISA is made up of growth shares. They’re a motley bunch, ranging from AI colossus Nvidia to sports nutrition firm Applied Nutrition from the FTSE 250.
In June, a handful of these growth shares suddenly jumped higher. These included:
- Applied Nutrition: +27.7%
- Axon Enterprise: +24.9%
- Beeks Financial Cloud: +30.4%
- Hims & Hers: +32.6%
Also, cross-border payments leader Wise (+23%) has recovered nicely from June lows, as has gaming platform Roblox (+33%) and digital bank Nu Holdings (+17%).
What’s been driving them higher? Well, the Iran ceasefire has certainly helped, as this has raised hopes that interest rates won’t jump higher.
However, there have also been positive company-specific developments. Applied Nutrition raised its full-year sales guidance, Wise dropped a strong set of results, and fintech infrastructure firm Beeks has been winning contracts for its new AI-powered analytics platform.
Meanwhile, Russia has lifted its ban on Roblox, President Trump (via a trust) bought shares of Axon, and data shows accelerating GLP-1 sales trends at Hims & Hers.
However, while the US-Iran agreement has given many growth stocks a shot in the arm, any restarting of hostilities could quickly send them into retreat. That’s a near-term risk for the seven names mentioned above.
A “crazy cheap” tech share
Moving on, I want to highlight Moonpig (LSE:MOON). This is a FTSE 250 growth stock that looks undervalued to me, despite rising 27% year to date.
As the UK’s leading online greeting cards company, Moonpig will be familiar to many readers. Through the app, customers can customise cards, adding photos and AI-generated images, and also send flowers and gifts.
This weekend, my daughter and I will create a thank you card on Moonpig for her teacher. We’ll personalise it, which should make him smile more than a generic card picked up off the supermarket shelf.
Our proprietary customer data remains an important part of our structural moat. Every day, we collect more than twice as much data as the rest of the greeting card market combined, deepening our competitive advantage.
Moonpig
In FY26, which ended 30 April, the company’s revenue increased 6.5% to £373m, with the core Moonpig brand growing 8.6%. Adjusted pre-tax profit jumped 13.4% to £76.5m, while free cash flow increased 11.2% to £73.5m.
From these numbers, we can see that the asset-light platform sports attractive fundamentals. In particular, the 20% free cash flow margin stands out. This cash is supporting ongoing buybacks and a higher dividend (25% hike last year).
The free cash flow yield here is approaching 9%. Last month, broker Panmure Liberum called the shares “crazy cheap for incredibly high quality and such a strong cash returns profile“.
Looking at the forecast for next year (FY28), the forward-looking earnings multiple is just 12. That’s despite Moonpig delivering consistent double-digit earnings growth, boosted by buybacks.
As for risks, the tough consumer backdrop isn’t ideal. This might see cash-strapped consumers opt for cheaper cards than larger, customised ones on Moonpig (or even just settle for a happy birthday message on Facebook or WhatsApp).
Taking a longer view though, I like the growth story here. Moonpig’s database of 113m customer occasion reminders helps drive repeat business, while it’s also growing nicely in new international markets, particularly Australia.
I’m considering Moonpig stock and think investors should too.
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 owns shares in Applied Nutrition, Axon Enterprise, Beeks Financial Cloud, Hims & Hers, Nu Holdings, Roblox, and Wise.
