Original-Research: Westwing Group SE (von NuWays AG): Buy

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Original-Research: Westwing Group SE - from NuWays AG

07.11.2025 / 09:00 CET/CEST

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Classification of NuWays AG to Westwing Group SE

Company Name: Westwing Group SE

ISIN: DE000A2N4H07

Reason for the research: Update

Recommendation: Buy

from: 07.11.2025

Target price: EUR 22.00

Target price on sight of: 12 months

Last rating change:

Analyst: Henry Wendisch / Antonio Perez

Q3 Review: topline and margin beat // PT increased to EUR 22

Yesterday, WEW released very strong Q3 figures, beating our topline and

margin estimates. In detail:

Return to topline growth powered by geographic expansion. As anticipated,

the shift in product assortment continued to weigh on GMV during Q3,

resulting in a 9% yoy decline in active customers to 1.16m (eNuW: 1.23m) and

a corresponding 14% drop in total orders to 460K (eNuW: 420k). This was

partially offset by a higher average basket size of EUR 252 (+22% yoy). Thus,

Q3 GMV landed at EUR 115m (+5.5% yoy), turning around the H1 decline (-4.2%

yoy). Accordingly, sales grew 3% yoy to EUR 99m. Regionally, DACH declined by

2% yoy to EUR 52m, as the product reassortment was launched later in the

region, whereas International took flight, climbing 11% yoy to EUR 47m as new

markets contributed significantly.

Westwing Collection share reaches new high. After posting a record 65% GMV

share of own products in Q2, WEW reached a new high of 66% (+8pp yoy), which

implies a 20% yoy growth in own products GMV and a 15% yoy decline in third

party products GMV. This is beneficial to gross margin, as the Westwing

Collection products carry structurally higher margins than third party

products. Consequently, gross profit in Q3 increased by 8% yoy to EUR 52m,

with an implied gross margin of 52.7% (+2.2pp yoy).

Top-line growth and gross margin fuel EBITDA upside. Driven by top-line

growth and gross margin expansion, contribution profit increased by 11% to EUR

33.6m (33.9% margin; +2.3pp yoy), which implies there were little efficiency

gains in fulfillment due to initially lower fulfillment efficiency in the

recently launched countries. G&A expense ratio increased 2pp yoy partly due

to increased SBPs (adjusted for a higher stock price). Notwithstanding these

factors, the company delivered an impressive adj. EBITDA growth of 74% yoy

to EUR 6.1m (6.2% margin; +2.5pp yoy).

Positive FCF driven by sound WC management. In Q3, WEW reported a positive

FCF of EUR 10m, mainly driven by a better cash conversion cycle (lower

receivables, higher payables) and a tight inventory management, thereby

avoiding the inventory buildup we had previously expected for the upcoming

holiday period. We still see positive FCF generation for Q4 (eNuW: EUR 23m,

thus EUR 17m for FY '25e) and remain confident that WEW could generate

double-digit FCF for FY ´25, in line with management´s guidance.

On its way to reach the upper end of FY ´25 guidance. In light of Q3

results, we have updated our FY ´25 estimates to EUR 447m (0.5% yoy) in sales

and adj. EBITDA of EUR 34.8m (7.8% margin, +2.4pp yoy), which corresponds to

the upper end of the guidance, as management signaled after the results.

Overall, the turnaround plan continues to materialize, with earlier than

anticipated top-line growth coupled with key cost drivers trending in the

right direction. Despite the significant stock price hike after the results,

we still see ample room for meaningful re-rating, highlighted by still cheap

multiples (i.e. 4.5x EBITDA FY '26). Therefore, we reiterate our BUY rating,

keep WEW in our AlphaList and increase our PT of EUR 22.00, based on DCF.

You can download the research here:

https://eqs-cockpit.com/c/fncls.ssp?u=0892ab2171d9c54dc0ae019e9f0cf1f3

For additional information visit our website:

https://www.nuways-ag.com/research-feed

Contact for questions:

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: research@nuways-ag.com

LinkedIn: https://www.linkedin.com/company/nuwaysag

Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss

bestimmter Börsengeschäfte.

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

analysierten Unternehmen befinden sich in der vollständigen Analyse.

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2225672 07.11.2025 CET/CEST

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