Q3 review: strong growth maintained and guidance in reach

Yesterday, TPG released its Q3 results, with solid top-line growth and continued margin improvement. In detail:

TPG’s growth cycle remained in full swing. Thanks to a growing number of partners (+23% yoy), thus a higher product offering, the active customer base grew even better by 49% yoy to 6.7m. Based on a constant AOV of € 127, GMV grew strongly to € 250m (+51% yoy). Mind you, that the figures also carry the inorganic effects from past acquisitions, it nevertheless show the growth dynamics of TPG’s platform business model.

Accordingly, Q3 sales increased by 35% yoy to € 189m, mainly driven by a strong organic growth of 22% yoy (9M: 26% yoy) and supported by past acquisitions, explaining the 13% yoy inorganic growth (9M: 17% yoy). On a segment level, the largest segment Consumer Goods grew by 41% yoy to € 112m (9M: +60% yoy) and explains 61% of group sales. This is followed by strong growth in Freight Goods (+39% yoy; 16% of sales) and Industrial Goods (+15% yoy; 12% of sales). For the first time, revenues from the new segment Optics & Hearing were shown, which came in at € 4.9m and a strong 26.5% adj. EBITDA margin.

Accretive acquisitions and op. leverage fuel profitability. Adj. EBITDA grew disproportionately by 79% yoy to € 12.5m, which implies a 6.6% margin (+1.6pp yoy). This is mainly attributable to a balanced mix of margin accretive past acquisitions and increased operating leverage as a result from the strong organic sales growth in the quarter, visible in further decline in the HR cost ratio by 0.1pp yoy as well as in the other OpEx ratio by 6.1pp yoy, according to our calculations.

Guidance well in reach. TPG confirmed its FY’25 guidance of € 715–735m in sales (eNuW: € 718m) and an adj. EBITDA of € 54–58m (eNuW: € 55m), which should be well achievable, in our view. Furthermore, the company reiterated its FY’26 targets (Sales: >€1bn; adj. EBITDA: € 70–80m). For the latter, TPG guides with a constant adj. EBITDA margin (26e vs. 25e), which might seem odd at first sight given the strong scale effects mentioned above, however, the recent acquisitions in the high-volume, low-margin pharma sector (ApoNow GmbH, Pharmosan Group, and Vamida Versandapotheke, expected sales of € 130m in FY’26), fully explain this effect. In essence, the higher volumes nevertheless add strong absolute additions to adj. EBITDA, but don’t pay into the group’s margin.

Overall, TPG´s shares appear highly undervalued, as the low multiples (2.7x FY’26e EV/EBITDA) should not be concurrent with a fast-growth e-commerce platform, in our view. Therefore, we reiterate our BUY rating with an unchanged PT of € 21.00.