With 15+ years of experience, elumeo is an established player and pricing leader within the jewelry industry, making high-quality gemstones affordable for everyone.

A 360° distribution approach through the use of proprietary linear TV channels, online shops, Smart TV app, selling agents, app and jooli, have allowed elumeo to successfully sell 0.57m products to 75k active customers in Europe alone. Short videos used to market the jewellery in the online shop is a particular USP compared to peers and fuels conversion and number of items sold.

With its AI-based video shopping platform and the “rising star” of the group, jooli, elumeo is at the forefront of digitization of the industry, targeting a new, younger group of customers. Since the launch of the platform in 2021, the number of (third party) channels and videos played has risen to 1,769 and c. 8m until Q2´23, bringing jooli closer to the edge of monetization.

On the back of a growing customer base (13% p.a. to 121k active customers in FY26e) within a globally growing jewelry industry (5% CAGR 2023-26e to € 340bn) and a stable average customer lifetime value (CLV) of c. € 1.000 (assuming a customer lifetime of five years), sales are seen to increase by 13% p.a. to € 75m in 2026e.

Since the business model is highly scalable, EBIT margin looks set to increase to 5% in 2026e, thanks to declining OPEX relative to sales.

While the war in Ukraine paired with challenging macroeconomic developments such as inflation, rising interest rates and declining GDP growth rates should burden the business in the short term, the outlook for the mid to long term is bright. Favorable trends such as the demographic change should bode well for elumeo. The start of the monetization of jooli (expected for end of 2023) should further fuel the topline from FY24e onwards.

Overall, the stock looks mispriced, trading on only 0.3x sales, not at all accounting for the potential of the unique video-shopping app jooli and bare price the core business of elumeo adequate.

Initiate with BUY and a PT of € 5.50, based on DCF