TPW has been literally smacked after the online furniture retailer reported a slowdown in sales growth last month – not ideal for a stock priced for such strong growth. After the update, we didn’t advocate catching the falling knife ~$14, and that view hasn’t changed, even with the stock another 6% lower. For us, TPW now needs to demonstrate it can justify its high growth valuation before we will consider the online retailer. Sales from July 1 to Nov. 20 rose +18% year-on-year, compared to an increase of +28% during the July 1 to Aug. 11 period – sales growth should be rising, not falling!
- We can see TPW bouncing at some point, but we would not advocate trying to second guess from what level – momentum is very weak.
MM is neutral towards TPW
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