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Pattern Group, Inc. Class A (PTRN)
NASDAQ:PTRN
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Pattern Group, Inc. Class A
(NASDAQ:PTRN)
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Rating:69Neutral
Price Target:
$15.00
▲(43.13% Upside)
The score is driven primarily by solid fundamentals (strong growth, improving profitability, and low leverage) and a constructive earnings update with upbeat guidance and margin expansion. These strengths are tempered by weak valuation signals due to a negative P/E and a neutral-to-mixed technical backdrop.
Positive Factors
Sustained Revenue Growth
Pattern has delivered durable top-line expansion across years, with ~37% reported annual revenue growth. Consistent multi-year growth signals scalable client adoption and platform traction, supporting reinvestment capacity and long-term market-share gains in e-commerce services.
Conservative Balance Sheet
Very low leverage and a meaningful equity base provide financial flexibility to fund growth, weather downturns, and invest in technology. Asset and equity expansion year-over-year supports capacity to scale without relying on debt, enhancing long-term resilience.
Improving Profitability & Operating Leverage
Rapid EBITDA growth and margin expansion demonstrate scalable operations and improving unit economics. Higher adjusted EBITDA on strong revenue growth indicates the business can convert growth into operating profits, underpinning sustainable cash generation as scale increases.
Negative Factors
Thin Net Margins
Net margins are narrow, leaving limited buffer versus cost inflation or demand softness. With modest absolute profit per revenue dollar, margin compression or customer churn could materially pressure earnings and free cash flow, increasing execution risk over the medium term.
Modest Cash Conversion
Operating cash flow is a small share of revenues, and several prior-year cash-quality metrics are missing, reducing confidence in consistency. Weak conversion constrains self-funded growth, increases reliance on equity or capital markets, and limits margin of safety in downturns.
Concentration on Amazon-derived Revenue
Despite rapid non-Amazon growth, the vast majority of revenue remains tied to Amazon-driven channels. High concentration on a dominant marketplace exposes the business to platform policy risk and pricing pressure; diversification progress is positive but still limited.
Pattern Group, Inc. Class A (PTRN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.85B
Dividend YieldN/A
Average Volume (3M)1.09M
Price to Earnings (P/E)―
Beta (1Y)4.08
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees2,100
SectorConsumer Cyclical
Sector Strength84
IndustrySoftware - Application
Share Statistics
EPS (TTM)-2.19
Shares Outstanding154,522,420
10 Day Avg. Volume1,010,857
30 Day Avg. Volume1,091,781
Financial Highlights & Ratios
PEG Ratio-0.04
Price to Book (P/B)7.05
Price to Sales (P/S)1.49
P/FCF Ratio53.60
Enterprise Value/Market Cap0.72
Enterprise Value/Revenue0.75
Enterprise Value/Gross Profit1.73
Enterprise Value/Ebitda-69.40
Forecast
1Y Price Target
$21.25Price Target Upside102.77% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)0.48
Revenue Forecast (FY)$3.07B
Pattern Group, Inc. Class A Business Overview & Revenue Model
Company DescriptionA tech-enabled ecommerce accelerator. Pattern helps brands grow sales across global online marketplaces (including Amazon, Walmart, TikTok Shop, etc.) via technology, analytics, logistics, advertising & content tools; they also purchase, distribute, and sell products on behalf of brands in many markets.
How the Company Makes Money
Pattern Group, Inc. Class A Earnings Call Summary
Earnings Call Date:Nov 05, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 05, 2026
Earnings Call Sentiment Positive
The earnings call presented a strong financial performance with significant revenue growth, especially in international and non-Amazon markets. The company also achieved a successful IPO, enhancing its cash position. Despite the positive outcomes, the GAAP net loss and negative net income were notable challenges. Overall, the highlights significantly outweigh the lowlights, reflecting a strong performance and positive future outlook.Q3-2025 Updates
Positive Updates
Record Revenue Growth
Pattern achieved a 46% year-over-year revenue growth, reaching $639.7 million in Q3 2025. This was driven by both new and existing brands.
International Revenue Expansion
International revenue grew 72% year-over-year to $52.9 million, representing 8.3% of total revenue, up from 7.0% a year ago.
Non-Amazon Marketplace Growth
Total revenue not attributable to Amazon grew 81% year-over-year, reaching $47.1 million, reflecting the effectiveness of the channel diversification strategy.
Adjusted EBITDA Increase
Adjusted EBITDA increased by 88% to $41.1 million, reflecting a 6.4% margin, up from 5% a year ago.
Successful IPO and Strong Cash Position
Pattern raised $135 million net of fees and expenses in the September IPO, ending the quarter with $313 million in cash and cash equivalents and no debt.
Negative Updates
GAAP Net Loss
GAAP net loss was $59 million, which includes IPO-related charges such as stock-based compensation and related taxes.
Negative Net Income
Net income attributable to common and preferred shareholders was negative $223 million, impacted by onetime dividend adjustments due to the IPO.
Company Guidance
In the third quarter of 2025, Pattern reported significant growth across key financial metrics. The company's revenue increased by 46% year-over-year, reaching $639.7 million, with strong performance in both U.S. and international markets. Net revenue retention hit a record high of 122%, and adjusted EBITDA grew by 88% to $41.1 million, reflecting a margin improvement from 5% to 6.4%. Revenue from non-Amazon marketplaces surged 81% year-over-year to $47.1 million, accounting for 7.4% of total revenue, up from 5.9% in the previous year. International revenue also saw a robust increase of 72% year-over-year, totaling $52.9 million, which represented 8.3% of total revenue, up from 7.0% a year ago. The company outlined four strategic priorities, focusing on investing in its intelligent technology layer, expanding channels and markets, reducing brand friction, and driving scale and efficiency to sustain growth and operational scale in the global e-commerce landscape. Looking ahead, Pattern expects Q4 2025 revenue to be between $680 million to $700 million, reflecting a growth of 32% to 36% year-over-year, with adjusted EBITDA projected in the range of $38 million to $40 million.Pattern Group, Inc. Class A Financial Statement Overview
Summary
Strong revenue growth with improving profitability and operating leverage, supported by a low-debt balance sheet. The main offsets are still-thin net margins and only moderate cash conversion versus revenue, with some prior-period cash-flow quality metrics missing.Income Statement
Profitability is improving on a solid growth base. Revenue rose from $1.37B (annual 2023) to $1.80B (annual 2024), and net income increased from $41.3M to $67.9M, indicating good operating leverage. Gross margin stayed strong and stable (~44%), while operating profitability improved (EBIT margin ~4.1% to ~5.1%; EBITDA margin ~5.0% to ~5.9%). The main weakness is that net margin remains thin (~3.8%), leaving less cushion if costs rise or demand softens.78
Positive
Balance Sheet
The balance sheet looks conservatively financed. Total debt is low at $30.1M versus $379.3M of equity (debt-to-equity ~0.08), providing flexibility and limiting financial risk. Equity and total assets expanded meaningfully year over year ($313.0M to $379.3M equity; $490.9M to $664.4M assets), consistent with a scaling business. A notable positive is strong return on equity in 2024 (~17.9%), though 2023 return-on-equity and debt-to-equity fields appear missing/invalid (reported as 0.0), limiting trend visibility.84
Very Positive
Cash Flow
Cash generation is positive and growing, but conversion is not consistently strong. Operating cash flow increased from $41.5M (annual 2023) to $70.3M (annual 2024), and free cash flow rose to $49.9M in 2024. Free cash flow covered a meaningful portion of net income in 2024 (~71%), supporting earnings quality. The key weakness is that operating cash flow relative to revenue is modest in 2024 (~3.9%), and several 2023 cash-flow quality metrics are missing/recorded as 0.0, reducing confidence in year-to-year cash conversion assessment.69
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 |
|---|---|---|---|
Income Statement | |||
| Total Revenue | 1.78B | 1.80B | 1.37B |
| Gross Profit | 771.88M | 781.35M | 601.21M |
| EBITDA | -19.21M | 106.14M | 68.48M |
| Net Income | -176.41M | 67.86M | 41.26M |
Balance Sheet | |||
| Total Assets | 843.11M | 664.42M | 490.92M |
| Cash, Cash Equivalents and Short-Term Investments | 312.80M | 175.62M | 127.23M |
| Total Debt | 31.01M | 30.13M | 19.10M |
| Total Liabilities | 301.74M | 285.10M | 177.92M |
| Stockholders Equity | 541.37M | 379.32M | 313.00M |
Cash Flow | |||
| Free Cash Flow | 75.71M | 49.90M | 26.98M |
| Operating Cash Flow | 90.91M | 70.35M | 41.48M |
| Investing Cash Flow | -15.19M | -20.44M | -14.50M |
| Financing Cash Flow | 61.59M | -2.90M | 0.00 |
Pattern Group, Inc. Class A Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $1.85B | -10.69 | ― | ― | ― | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
41 Neutral | $12.18M | -0.36 | -137.15% | ― | 4.65% | 55.05% | |
41 Neutral | $14.64M | -0.06 | -205.65% | ― | 72.57% | -261.66% | |
41 Neutral | $7.75M | -0.05 | -269.14% | ― | -73.83% | 98.11% |
* Consumer Cyclical Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.