Allegro Earnings: Strong Polish Results; Membership Pricing Increases Represent Encouraging Signs

Wide-moat Allegro reported solid fourth-quarter results, and would have comfortably topped our profit forecast if not for taking another impairment in its international segment. We're encouraged by guidance for low-double-digit medium-term growth in gross merchandise volume, or GMV, in its profitable Polish market. This suggests that the online commerce stalwart should be able to defend its 45%-50% market share and roughly 35% adjusted EBITDA margin in the country despite macroeconomic pressure and intensifying competitive pressure. As we digest the results, we've raised our fair value estimate to PLN 36 per share from PLN 34. Shares look attractive at current prices.