Morgan Stanley rates 3PL as Equal-weight

Published: 2025-05-25 20:29:07 ET MS

Published on 05/25/2025 at 20:29

Morgan Stanley notes 3P Learning's trading update pre-announced three FY25 metrics. Revenue is expected to remain flat year-on-year at $110m, slightly above the broker's forecast, and earnings (EBITDA) will grow by at least 20% to circa $14.4m.

The broker highlights this performance as a positive surprise amid softness in consumer markets and product refresh cycles.

Mnagement expects cash on hand between $8-10m versus the analyst's $16m estimate, with attention now turning to R&D capitalisation and working capital changes.

While product improvements and cost discipline are welcomed, Morgan Stanley seeks further evidence these changes are converting to higher sales, adoption of bundles, and improved pricing power.

The broker retains an Equal-weight rating and a $0.90 target price. Industry view: In Line.

Sector: Consumer Services.

Target price is $0.90.Current Price is $0.64. Difference: $0.26 - (brackets indicate current price is over target). If 3PL meets the Morgan Stanley target it will return approximately 29% (excluding dividends, fees and charges - negative figures indicate an expected loss).