By Lisa Thompson

NYSE:PERF

READ THE FULL PERF RESEARCH REPORT

Perfect Corp. (NYSE:PERF) closed out 2024 with non-IFRS EPS growth more than tripling revenue growth as costs were cut, and the company had fewer shares outstanding due to the stock buyback at the end of 2023. While the beauty industry majors remain in the doldrums due to a slump in China spending and inroads by smaller brands, Perfect Corp. continues the rapid growth of its B2C mobile app revenue. That business grew 30% as active paying subscribers topped one million users by year-end, a number that grew 14% from the end of 2023. As that business is now over 57% of sales, total revenue growth should accelerate. This does not even include any effect from the purchase of Wannaby that increases the company’s TAM by launching it into the fashion industry with Wannaby’s leading-edge fashion try-on offerings. Perfect enters this market with Wannaby having already captured the highest-end fashion customers. Its customer base is primarily in Europe, while Perfect Corp. has a strong presence in Asia and the US as well, and will bring Wanna to those geographies. Besides new markets, Perfect also has new offerings in 2025. The most exciting, of course, is Perfect GPT, the AI shopping assistant. While several companies have implemented proof of concept pilots, the current business environment for the beauty industry is making them hesitant to add more expenses. As a result, Perfect Corp. plans to first add it to its B2C YouCam Makeup mobile app, which is expected to be launched before Q2 in a few countries.

The company gave guidance of year-over-year total revenue growth rate of 13% to 14.5% for 2025 compared to 2024. As a profitable AI-based SaaS company, we believe it deserves an EV-to-sales multiple of at least 2.7 times 2025 sales and a stock price of $3.44.

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