AO is the UK's leading online retailer of major domestic appliances such as washing machines and fridges and over the past 20 years it has built an excellent reputation for brilliant service. AO will report FY results on 26 June and has successfully completed its "Pivot to profit strategy". AO has exited FY24E with good momentum and we anticipate AO’s excellent customer service and AO Five Star membership club offer will accelerate repeat customer purchases across a broad range of electricals. This underpins our forecast revenue CAGR of 13% FY24E-FY27E and our Adj. PBT CAGR of 26% FY24E-FY27E. As a capital-light online retailer, we predict over 80% of Adj. PBT converts to free cashflow (“FCF”) resulting in over £130m FCF FY25E-FY27E. We initiate coverage with a Fair Value of 140p based on a 5% cal 2025 FCF yield, equivalent to c.11x cal 2025 EV/EBITDA and c.22x cal 2025 PER, under 1x our EPS CAGR FY24E-FY26E.