XPEL Inc. Common Stock (XPEL) fair value

ACCE thesis

XPEL makes protective films for vehicles, most notably its paint protection film (PPF) and window film, sold through a network of independent installers in North America, Europe and Asia. The moat is partly the installer network and brand, and partly the fact that film is a consumable attached to new car sales and aftermarket upgrades, so demand scales with vehicle production and the pool of enthusiast owners. Revenue growth of 14.7% and a 42.9% gross margin are the numbers to test against the thesis, since they say pricing and mix are holding up. Trading at 23x trailing earnings with a 19.4% ROE, the stock is not cheap on a short-term view, so the question for a deeper look is whether the installer channel and the shift toward higher-value PPF can keep compounding margins through a softer auto cycle. The company sits outside major indices, so liquidity and coverage are thinner than the market cap would suggest, which is worth weighing in position sizing.