doubtful share price rise, page-2

been watching this but hard to find a reason why people are buying furniture online when you cant see and feel what the furnitures made of. People dont buy furniture every year and competitions are everywhere. even its probably one of the one who does online furniture sale, so why would the share price rise?

@shoomer

Here are a few possible reasons:

- TPW are debt-free, self-funded and growing their revenue line at 40% pa; which, apart from being a remarkable growth rate in itself, also means that they are conquering market share in spite of competition.

- Gross Margin has been slowly but steadily improving, since FY16, and yet the Company is still trading at ~5x FY19 Gross Profit, which is not exactly a nosebleed valuation for something exhibiting that sort of growth rate.

- Online penetration (i.e. online sales as a % of total sales) in the furniture and houseware sector is growing, and yet it is still lagging way behind the corresponding rate in more mature markets (US/UK); so, it has plenty of room to grow further.

Yes, there is competition (and it is only going to get worse, with Amazon and others rolling out their own online platforms). But, given its undemanding starting point in terms of valuation multiples, and as long as revenue/GP growth continues at its current pace, I don’t find it particularly weird that TPW’s SP keeps rising accordingly.