Allegro Earnings: Shares Look Attractive Despite Downbeat International Results and Slower Ad Growth

We continue to view wide-moat Allegro's current price as an attractive entry point for investors seeking high-quality exposure to e-commerce. While we've trimmed our fair value estimate to PLN 44.50 from PLN 46 after digesting earnings—largely attributable to weak results out of the firm's international segment and slower growth in its profitable advertising business than we'd hoped (albeit still up 30% annually), our reaction is less punitive than that of the market, which sent shares spiraling downward 8%-9%. We'd urge investors to consider the company as a play on the attractive Polish online commerce market in which it maintains dominant (mid-40s) market share (our estimates) with an international segment that represents a small drag on an otherwise sterling business.