AO has ended FY25E on a high with Adj. PBT rising c.30% (c.9% above consensus expectations), driven by its continuing commitment to excellent customer service. We anticipate AO’s investments in its proposition, Five Star membership club, market-leading delivery offer and recycling facilities will lead to significant profit and cashflow potential which we think is materially under-valued. Despite the macro cost-headwinds in FY26E, we forecast a 20% CAGR in Adj. PBT FY25E-FY28E which we think is undervalued, trading on under 14x cal 2026 PER. We raise our Fair Value from 140p to 150p, equating to a cal 2026 FCF yield of 5%.