I would say it's a fast grower but I admit revenue has stagnated for the last three years which I believe is due to the 15% online market penetration of makeup and skincare in Australia, essentially capping Adore Beauty's earning potential as a pure e-commerce business model.
My big takeaway from Peter Lynch is all things equal, an increase in share price correlates with an increase in earnings and buying into a company before or early in a profit growth cycle is where multi-baggers are found.
Adore Beauty is a boring business that is simple to understand. Its fundamentals continue to improve YOY and the company has an obvious path to substantially more revenue - physical store network expansion.
When Adore Beauty has 25 locations in 2027, 50 locations in 2030, 100 locations in 2035 and the share price has multiplied several times over - people will be regretting not buying right now when the company has only just started expanding across the country and it's very obvious the company will be larger in the future than it is today.
I think you're putting too much weight on the iKOU acquisition. Yes it might have been an overpriced buyout but it does come with some positives and with Adore Beauty's resources behind them, I'm confident management will grow the iKOU brand much further and faster than the previous owners.
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