First Berlin Equity Research on 05.11.2024 initiated coverage on The Platform Group AG (ISIN: DE000A2QEFA1). Analyst Alexander Rihane placed a BUY rating on the stock, with a EUR 16.00 price target.

Abstract
The Platform Group (TPG) owns and operates over 25 e-commerce platforms. The company has a proven track record of developing its own platforms as well as acquiring existing platforms, which it successfully integrates into its platform model. Acquisitions are streamlined and repositioned to achieve stronger growth and higher margins. Based on proprietary e-commerce software, which builds on TPG’s own retail DNA, TPG commands the complete e-commerce value chain, making the company a full-service provider for e-commerce. This results in an attractive value proposition for merchants to use its platforms as a digital sales channel. We see plenty of scope for further organic growth as the market share of TPG’s platforms is still low. Further acquisitions are an important second value driver, as acquisition target prices remain attractive and well below TPG’s current valuation. We see TPG on a path to grow both organically and inorganically and increase margins by exploiting the network effects inherent in platform economics. A solid balance sheet and strong free cash flow generation make this intriguing investment case all the more attractive. Our DCF model suggests a significant undervaluation. We initiate coverage with a Buy rating and a €16 price target.