3Anno·

Here is why I am very bullish for Westwing in the long term @christian , as I promised to answer your question in a separated post:


- They transform their inventory to own-brand products. They will provide %8-10+ contribution margins... Increasing profits.

- Highly addictive, very unique shopping experience. Plarform is like home decor magazine, flipping thru personalized curated recommendations according to past purchases. It is like Pinterest of home decor shopping. Very high retention rates.

- What would a reasonable buyer pay for this business in the public markets? Take a look at some industry comps:

● Wayfair (W): 49x EBITDA

● Amazon (AMZN): 22x EBITDA

● Zalando (ZAL): 31x EBITDA

● Overstock: 24x EBITDA

Let's assume a buyer would pay ~25x EBITDA for WEW. That gets us EUR 2.275B in enterprise

value. Add back EUR 76M in net cash on the balance sheet, and you get EUR 2.35B in market cap or

EUR 115/share. That's a 248% upside from the current price.


May be right or not, do your own DD guys ;) General market conditions and supply chain issues are my bearish theses...

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8 Commenti

immagine del profilo
Just for the record, when I wrote this post, Westwing was below €33...
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immagine del profilo
well if you compare ebita multiples you also have to compare ebitda growth rates. how do they look in comparison?
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immagine del profilo
@christian YOY 2019 to 2020, Westwing has the best growth... I believe it will improve further, also considering the company guidance...
immagine del profilo
@Sedo check years from 2016 onwards, seems like an outlier (corona effect) for me.
immagine del profilo
@christian in that case I wouldn't invest none of these stocks above... They all had the same pump from Corona effect. Nevertheless, ecommerce will keep growing. I think the unique experience of Westwing will be a differentiator... Anyway, time will tell :) Thanks for the questions. One should always ask these kinda questions before investing any company 👍
Considering moat is important here. Does Westwing have a moat and if so, is it widening?
Criteria:
- network effect
- switching costs
- cost advantage
- great scalability
- optionality
- intangibles (brands, patents etc)

The valuation does seem attractive and I believe it’s a great marketplace. However, I am not sure how wide its moat is..
Plus, what is their counter-positioning to something like PINS? (as they could easily create something similar)
immagine del profilo
@ACSterling the moat is building up. If the moat was already there, we wouldn't talk about below 33 euros right now. So, it is all about betting if this company is going to get there or not.

Two things are also very important for me. One is Playstore ratings (4.8) and other one is Glassdoor employee ratings (4.2)... Beside everything else, these two things also signal me positivity...

I think PINS can do what Instagram is doing for great range of products (e-commerce infrastructure) but the advantage of Westwing is that, they invest on tech only for home decoration, home products and customize their platform accordingly.... İI you use their app and have a look from customer point of view, you can maybe say more about the experience... What I have seen in their app, smooth and very user friendly. The experience is also unique. I think they are clearly undervalued. Of course in long term...
@Sedo wow the two mentioned ratings are indeed very strong.
I should try out the app to get some insights into its uniqueness. Thanks!
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