The THG share price is up 96% since June. Is the recovery on?

Selling for pennies and having shed 94% of its share price over the past five years, THG (LSE: THG) may look like a basket case. Still, the THG share price has grown by 96% just since June.

So â might this be the start of a recovery?

If so, might now be a good moment for me to consider adding the shares to my portfolio?

A growth story with limited growth lately

The company released a trading update today (13 January) and that provides some indication of the current state of the business.

Total revenue fell 2% in 2025. However, this year saw its once much-touted Ingenuity division taken private, somewhat skewing the numbers. Looking only at revenues in the continuing business, THG reported 2% year-on-year growth.

That is fine in my view, but with its digital focus, THG is often seen as a growth stock.

I don’t excited about 2% revenue growth at a growth stock, although the statement did show that revenue growth towards the end of last year was strong.

Why has the share price soared?

But while the latest trading statement did not excite me much, the THG share price has soared over the past half-year or so. Why?

Getting rid of Ingenuity, which sometimes felt like a bit of a black box, has arguably made it easier to value THG.

While the company remains loss-making, its operating loss in the first half was slightly smaller than in the prior year period, while net debt was also reduced.

At Â£321m at the end of June, however, it is substantial for a company that currently has a market capitalisation of Â£723m.

I think a lot of investors reckon that with revenue growth in the continuing business, the companyâs economics could grow more attractive over time. It has an existing customer base and some well-known nutrition brands.

Lots still to prove

If the business shows even fairly modest improvement in its financial performance, I could well see an argument for the share price to march further upwards.

So, am I tempted to buy? Absolutely not.

As each Januaryâs seasonal bodybuilders and supplement buyers know, sometimes the dream is more compelling than the reality.

The THG dream remains attractive in many ways: building on the success and experience of its protein business, it can develop a range of digital shopfronts and use targeted marketing to drive repeat business cost effectively.

I’m not ready to buy!

Another long-term duffer among UK tech shares — Ocado, down 88% over five years — continues to try and run a retail business (as a joint venture with Marks & Spencer) and sell its technology to other retailers.

By shedding Ingenuity, THG has moved from that sort of business model to a more clearly focussed one.

I think that has probably helped crystallise the current THG investment case. That may have helped the share price.

But the rump business is growing revenues fairly modestly at best, remains indebted, and continues to make losses. As with Ocado, the business case remains unproven when it comes to turning a consistent profit.

Any good news could help the share price, but I think THG still has a lot to prove and I will not be investing.

The post The THG share price is up 96% since June. Is the recovery on? appeared first on The Motley Fool UK.

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C Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.