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Stock of the day
Temple & Webster
Temple & Webster’s stock fell sharply after reporting slower-than-expected revenue growth, raising concerns over valuation and modest profits.
(AI video summary)
This video was created on 26 November 2025 for IG audiences by ausbiz.
ASX code: TPW
Temple & Webster's stock falls as revenue growth slows
Temple & Webster, the online retail platform, saw a sharp market reaction after reporting slower-than-expected revenue growth from July to mid-November. Analysts highlighted concerns over high valuations and modest profits.
- Group revenue rose 18% year-on-year (YoY), down from a 28% rise in the prior quarter and below the 23% consensus forecast
- Earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin guidance of 3% to 5% was reaffirmed, with the company aiming for $1 billion in annual revenue.
- The stock halved from $28 to $14, reflecting investor caution over profitability versus market capitalisation.
Profitability and valuation concerns
Temple & Webster reported $11 million in net profit, but its $3.4 billion market capitalisation suggests stretched valuations.
The stock’s trajectory seems to echoe the dot-com boom, where high-growth stories often lacked sufficient profits to justify valuations.
Investment outlook
Temple & Webster’s results highlight the risks of investing in high-growth, small-cap online retailers with modest profit margins. While the business model shows promise, valuation and earnings realities suggest caution for new investors.
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