Pattern Group stock rating reiterated by BMO amid short report pushback

Investing.com - BMO Capital has reiterated its Outperform rating and $22.00 price target on Pattern Group Inc (NASDAQ:PTRN) following a recent sell-off triggered by a short report from The Bear Cave. The target price represents a 74% upside from current levels, aligning with the broader analyst consensus that remains strongly bullish with price targets ranging from $20 to $23.

BMO Capital described the recent stock decline as "unwarranted," stating that the short report "lacked a proper understanding of PTRN’s business model and the value it creates for brand partners." The stock has indeed taken a significant hit, falling nearly 18% over the past week and currently trades just above its 52-week low of $12.00.

The investment firm specifically rejected claims that "Pattern is just an overhyped third-party seller," instead highlighting the company’s technology-driven platform that helps accelerate brand sales. While Pattern generated $2.29 billion in revenue over the last twelve months with a healthy gross margin of 43.45%, the company is not yet profitable.

BMO Capital emphasized that Pattern Group’s "fundamental story is accelerating as existing brands further lean into Pattern," suggesting continued business momentum despite the negative report.

The $22.00 price target represents an approximate valuation of 11.5 times BMO’s 2026 estimated adjusted EBITDA, which the firm characterized as "likely conservative."

In other recent news, Pattern Group Inc. reported impressive financial results for the third quarter of 2025, with revenue reaching $639.7 million, a 46% increase compared to the previous year. The company also posted an EBITDA of $41 million, which came with a 6.4% margin, exceeding expectations from both Evercore ISI and other analysts. Despite an earnings per share loss of $2.19, investor confidence remained strong. In a strategic move to bolster its AI-driven retail advertising capabilities, Pattern Group acquired ROI Hunter, a platform known for its performance-driven retail media strategies. This acquisition is expected to enhance Pattern’s position in the ecommerce sector. Following these developments, several analyst firms have adjusted their outlook on Pattern Group. KeyBanc raised its price target to $20, citing strong third-quarter results and net revenue retention of 122%. Stifel increased its price target to $22, highlighting the company’s accelerated revenue growth. Evercore ISI also raised its target to $23, maintaining an Outperform rating on the stock.

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