Earnings call transcript: Outlet Group posts strong Q3 2025 growth and margin gains

Jefferies upgraded Pattern Group Inc's stock rating to Buy from Hold, raising its price target to $27.00 from $20.00. The firm highlighted Pattern Group's consistent high growth rates among existing brand customers, now bolstered by contributions from new brands. The stock has risen 76% year-to-date, indicating increasing investor confidence in the company's expansion strategy.

Jefferies anticipates further upside, with revenue and EBITDA estimates growing 5% and 7% above consensus, respectively. The upgrade is based on the potential for ongoing valuation adjustments that better reflect Pattern Group's growth trajectory. Pattern Group specializes in providing consumer technology platforms for brands to sell at scale on e-commerce marketplaces.

The company directly acquires inventory from partners, maintaining control over the customer experience and gathering valuable data throughout the product journey. Pattern Group's growth strategy has proven successful, with 41% revenue growth at existing brand partners in fiscal year 2026 and a net revenue retention rate of 127% over the past year.

Analysts view the stock as slightly undervalued at current prices. Pattern Group reported impressive third-quarter 2026 earnings, with revenue up 38% to $886 million and adjusted EBITDA increasing 40% to $57 million. The company also improved its margin to 6.5% and raised its full-year revenue guidance to approximately $3.5 billion and adjusted EBITDA guidance to about $220 million.

The company's CEO, Dave Wright, credited the growth to its Pattern Intelligence platform, which uses extensive data to boost brand performance across shopping channels.