TBTG’s organic LED technology brand is delivering sustainable high-margin growth in an expanding market where adoption is increasing. Brand recognition/trust, a major R&D pipeline and pace of new launches give it competitive advantage. It also has a pipeline of NPD in its acquired brands (c10% of sales), which offer other well-established clinical technology for use at home (e.g. laser). Their impact should increase as growth accelerates. TBTG’s high margin growth, capital-light and FCF-rich traits are attractive, and prudent forecasts offer upgrade risk. In our view, this isn’t priced in on 10x ex cash P/E (0.9x PEG), or 7x EV/EBITDA falling to 5x.
