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Allegro.EU SA Ordinary Shares ALE

Morningstar Rating
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Company Report

Size Is King: Online Commerce Set for Midterm Acceleration, Consolidation as Leaders Extend Reach

A dour consumer spending outlook suggests that the e-commerce industry is in for a challenging 2024-25, with top-line growth set to slow again in 2024 before a gradual return to 10%-plus annual growth by 2028. Despite the pressure, we continue to see investable opportunities for long-term investors, with wide-moat Allegro and narrow-moat Chewy representing our top picks. Overall, our thesis regarding online marketplaces remains intact: the largest, competitively advantaged players should continue to consolidate market share, with deeper expansion into advertising, financial services, and fulfillment set to strengthen their competitive edge. Our forecasts call for the average online marketplace in our coverage to expand take rate by 240 basis points between 2023-28, aligning with this view.

Price vs Fair Value

ALE is trading at a 69% premium.
Price
PLN 37.06
Fair Value
PLN 99.00
Uncertainty
High
1-Star Price
PLN 67.90
5-Star Price
PLN 72.70
Economic Moat
Zmffd
Capital Allocation
Jtzdwsc

Bulls Say, Bears Say

Bulls

Higher costs of borrowing should deter irrational competitors like Sea Limited from targeting the Polish market over the near to medium term.

Bears

Allegro could be forced to invest more heavily behind its Smart! program over time, adding incentives like video streaming and music to compete with Amazon and Alza (Czech Republic) on more level footing.

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News

Trading Information

Previous Close Price
Day Range
52-Week Range
Bid/Ask
/
Market Cap
Volume/Avg
/

Key Statistics

Price/Earnings (Normalized)
12.37
Price/Sales
3.81
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
0.17%

Company Profile

Allegro is a large Polish holding company with a suite of complementary online retail properties including Ceneo (price comparisons), EBilet (live events tickets), We|Do (courier services), and the Mall Group (online and offline retail in adjacent Central European markets). The firm is best known for its eponymous e-commerce marketplace, which generates predominantly third-party product sales across the home and garden, electronics, health and beauty, automotive, and supermarket categories. The operator boasts nearly 50% share of the Polish e-commerce market by GMV, per our calculations and PWC data, and has built out a suite of ecosystem functionality that includes financial, logistics, and advertising services.
Sector
Consumer Cyclical
Industry
Internet Retail
Stock Style Box
Mid Growth
Total Number of Employees
6,624

Competitors

Valuation

Metric
ALE
BABA
SE
Price/Earnings (Normalized)
12.378.481,911.98
Price/Book Value
4.321.296.50
Price/Sales
3.811.423.22
Price/Cash Flow
22.116.8322.81
Price/Earnings
ALE
BABA
SE

Financial Strength

Metric
ALE
BABA
SE
Quick Ratio
1.561.551.02
Current Ratio
1.771.791.46
Interest Coverage
1.876.67
Quick Ratio
ALE
BABA
SE

Profitability

Metric
ALE
BABA
SE
Return on Assets (Normalized)
4.42%−0.07%
Return on Equity (Normalized)
7.83%−0.21%
Return on Invested Capital (Normalized)
7.04%−0.12%
Return on Assets
ALE
BABA
SE
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Internet Retail Industry Comparables

1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Amazon.com Inc
AMZN
QvqkqzzhpGwhk$2.0 Tril
PDD Holdings Inc ADR
PDD
QhnhkkccFgnclnj$199.8 Bil
Alibaba Group Holding Ltd ADR
BABA
TlngfjmTdxv$178.5 Bil
MercadoLibre Inc
MELI
GyvbgsxnyRkwp$81.1 Bil
Sea Ltd ADR
SE
DncmjhjTlnsh$43.3 Bil
JD.com Inc ADR
JD
ZstfjqxytVmnv$42.9 Bil
eBay Inc
EBAY
SslzxvhbcFdtcbl$27.2 Bil
Chewy Inc
CHWY
VcqdpkctkKfmkg$11.1 Bil
Maplebear Inc
CART
DbrkysyTprz$8.3 Bil
Etsy Inc
ETSY
DbkjklytKpbc$7.0 Bil

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