1 top FTSE 250 growth stock to consider for an ISA in April

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After sliding over 11% in a month, the FTSE 250 index looks great value again. And many mid-cap stocks that appear to have years of potential growth left in the tank now appear cheap.

Here’s one high-quality FTSE 250 growth share that I think deserves closer attention in April.

Moonpig

With over 12m active customers, Moonpig (LSE:MOON) is the leading online greeting card company in the UK and Netherlands. And despite low consumer confidence, the firm’s still managing to grow, suggesting it’s capitalising on a strong secular trend.

For fiscal 2026 (FY26), ending April, Moonpig expects high single digit percentage revenue growth. Growth in adjusted earnings per share is anticipated to be as much as 12%, driven by strong free cash flow generation and the impact of this year’s £60m share buyback.

Speaking of which, the board has authorised a £65m buyback for FY27. This indicates Moonpig is clearly confident in its growth prospects.

Beyond the strong brand and market-leading position, Moonpig’s data advantage stands out to me. It has over 107m customer occasion reminders (birthdays, anniversaries, etc), which it uses very effectively to drive repeat business.

Indeed, an impressive 90.9% of revenue was generated from existing customers in H1 (up from 88.3% the year before). I believe this large and growing database gives Moonpig a significant edge over rivals.

Compelling customer proposition

Speaking as a customer myself, I like designing a card online and having it delivered. It’s far better than rushing to the supermarket at the last minute to rummage around the shelves for a generic card.

What started as a personalised birthday card for my daughter a while back has mushroomed into birthday cards for other loved ones. And Christmas cards and a funny engagement card for my mate recently.

At some point soon, I’ll probably join the Moonpig Plus annual subscription service, which now has over 1m members.

Also worth mentioning are the AI-generated stickers and audio or video messages, which allow highly personalised cards and inside jokes. These are now very popular.

Cheap stock

Moonpig’s revenue has surged from £173m in FY20 to an expected £400m next year. And net profit is set to almost double over this time.

Yet, the share price has crashed around 51% since the firm listed in 2021.

Today, the stock trades cheaply at just 11 times FY27’s forecast earnings. The firm has also started paying a small but growing dividend (the forward yield is around 2%).

What could go wrong? Well, Moonpig’s Experiences segment (spa days, stadium tours, etc) has struggled. And rising inflation could see some struggling customers cut back on personalised cards.

Then again, the UK is arguably the greeting card capital of the world. We send them not just for birthdays and Christmas, but for Valentine’s Day, Mother’s Day, Father’s Day, to say ‘Thinking of You’, ‘Get Well’, or to congratulate someone on getting a promotion.

Yet today, online card penetration is still only 6% by volume and 15% by value in the UK. Then there’s international potential. This suggests Moonpig has a large market opportunity ahead of it, making the stock worth looking at in April.

The post 1 top FTSE 250 growth stock to consider for an ISA in April appeared first on The Motley Fool UK.

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Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has recommended Moonpig Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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