| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 40.49 | 9 |
| Intrinsic value (DCF) | 13.70 | -63 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 1.35 | -96 |
THG Plc is a UK-based e-commerce technology company specializing in beauty, nutrition, and luxury retail through its proprietary digital platforms. Operating under brands like Lookfantastic, Cult Beauty, Dermstore, and Myprotein, THG offers over 1,300 premium beauty and wellness brands alongside its direct-to-consumer (D2C) sports nutrition products. The company's THG Ingenuity platform provides end-to-end e-commerce solutions, including hosting, logistics, and digital brand management, serving third-party businesses. Additionally, THG operates luxury hotels, event spaces, and subscription services under THG Experience and THG OnDemand. Founded in 2004 and headquartered in Manchester, THG has expanded globally, leveraging its vertically integrated model to combine retail, technology, and logistics. Despite challenges in profitability, the company remains a key player in the fast-growing e-commerce and wellness sectors, with a strong digital-first approach.
THG Plc presents a high-risk, high-reward investment opportunity due to its diversified e-commerce portfolio and proprietary technology platform (THG Ingenuity). The company operates in high-growth segments (beauty, sports nutrition, and luxury retail) but has struggled with profitability, reporting a net loss of £326.1 million in its latest fiscal year. Its beta of 2.196 indicates significant volatility, aligning with broader e-commerce sector risks. However, THG's strong revenue base (£1.75 billion) and cash reserves (£308.6 million) provide liquidity, while its asset-light model (via Ingenuity) could drive margin improvements. Investors should weigh its growth potential against execution risks, including intense competition and macroeconomic pressures affecting discretionary spending.
THG Plc competes in the fragmented e-commerce and D2C wellness markets, differentiating itself through vertical integration (brand ownership, logistics, and tech infrastructure). Its beauty segment (Lookfantastic, Cult Beauty) competes with pure-play beauty retailers, while Myprotein faces rivals in the global sports nutrition space. THG Ingenuity provides a competitive edge by offering end-to-end e-commerce solutions, similar to Shopify but with a stronger focus on enterprise clients. However, THG lacks the scale of Amazon or Alibaba in logistics and faces pricing pressure from discount-driven platforms. Its luxury and hospitality segments (THG Experience) are niche but face competition from established travel and lifestyle brands. The company’s asset-heavy approach (warehouses, hotels) contrasts with leaner e-commerce peers, creating both operational leverage and cost risks. Success hinges on improving margins in Ingenuity and stabilizing its D2C brands amid rising customer acquisition costs.