ASX stock of the day: Temple & Webster (ASX:TPW) goes from strength to strength

The Temple & Webster Group Ltd (ASX: TPW) share price is on fire today, rising by more than 9%. Here’s why this growth share is so popular
The post ASX stock of the day: Temple & Webster (ASX:TPW) goes from strength to strength appeared first on The Motley Fool Australia. –

surging asx ecommerce share price represented by woman jumping off sofa in excitement

The Temple & Webster Group Ltd (ASX: TPW) share price continues to deliver for shareholders. At the time of writing, TPW shares are up a healthy 8.76% to $11.05 a share. That gives this ASX growth star a market capitalisation of $1.33 billion and a price-to-earnings (P/E) ratio of 94.66.

Even though it has seen a hefty jump in valuation today, the Temple & Webster share price is still a ways from the 52-week high of $14.05 a share we saw back in October.

So who is Temple & Webster? And just how much has this company grown over the past few years?

Furniture at your door

Temple & Webster is an online marketplace dedicated to furniture, decor, and all things ‘home’. The company launched in 2011. 

According to the company, its name comes from William Temple and John Webster, who were “convict artisans” commissioned to make fine furniture for Governor Lachlan Macquarie in the early 1820s.

Unlike furniture/homewares retailers such as Harvey Norman Holdings Limited (ASX: HVN) and Nick Scali Limited (ASX: NCK), which happen to be Temple & Webster’s competitors, this company is online only.

Its online store offers products as diverse as wall art, lighting, rugs, board games, gym equipment, turntables, and bird cages. That’s all in addition to every piece of furniture you can think of, including beds, lounges, and dining tables.

The company offers payment through a range of buy now, pay later (BNPL) providers like PayPal Holdings Inc (NASDAQ: PYPL), Zip Co Ltd (ASX: Z1P), Humm Group Ltd (ASX: HUM), and (of course) Afterpay Ltd (ASX: APT).

Why are Temple & Webster shares so popular?

Even though today’s market moves have propelled Temple & Webster almost 9% higher, there has been no major news out of the company that might provoke such a decisive gain.

My Fool colleague James Mickleboro postulated this morning that a possible reason could be a half-year earnings report from property classifieds giant REA Group Ltd (ASX: REA). REA spoke positively about the Australian housing market in its update, which investors may have determined might mean higher demand for Temple & Webster’s products. 

But Temple & Webster has a very strong track record of its own. Temple & Webster shares are up more than 186% over the past 12 months, and up more than 1,700% over the past 5 years. Needless to say, this company has been growing fast.

Just this week, the company delivered its earnings results for the 6 months to 31 December 2020. Temple & Webster reported year-on-year revenue growth of 118% to $161.6 million, assisted by active customer growth of 102%. That helped the company post earnings before interest, tax, depreciation, and amortisation (EBITDA) of $14.8 million, which was up a staggering 556% year on year.

Temple & Webster is one of the few ASX companies that have enjoyed a boon from the pandemic and associated lockdowns. Furniture was one of the few areas left that investors might have assumed online retailers would not disrupt — 2020 and COVID-19 turned that logic on its head.

Excitement over the company’s future, as well as the REA report this morning, is probably the reason behind the Temple & Webster share price outperformance today. It will be interesting to see what 2021 brings!

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, Temple & Webster Group Ltd, and ZIPCOLTD FPO and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended Humm Group Limited, PayPal Holdings, REA Group Limited, and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX stock of the day: Temple & Webster (ASX:TPW) goes from strength to strength appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!