The InPost bear case: Risk reward calculation
Lockers, Margins and Mispricing: A Three-Scenario Look at Europe’s Most Misunderstood Logistics Flywheel
Every cycle produces one company that looks deceptively simple from the outside. A business that the market files into a neat box, usually the wrong one. Today’s subject is often dismissed as “just another last-mile logistics provider,” a mediocre business model with high costs.
Yet InPost has managed to create a physical network effect that improves structurally with density, not volume. It has extraordinary unit economics and a level of customer affinity unusual in logistics (third-party-verified NPS >80).
The Bear Case: Competition, Saturation and the International Question
InPost has gone public (for a second time) in 2021, so the public track record is not very long and in their first time as a public company the business was running on a “growth at all cost” strategy. There is also a risk of empire building with this company. If you listen to founder you'll notice that he sounds more like a tech CEO than a logistics company. Will InPost always chase new expansion opportunities or can investors expect returns of capital in the medium to long term future? Today skeptics typically focus on three pillars.
Poland is maturing and competition is intensifying
Locker deployments from competitors are accelerating.
Market share gains are harder at higher penetration.
The Polish ecommerce environment is no longer the hyper-growth engine it was in 2020–2022.
This leads bears to argue that margins have peaked.
International expansion remains unproven
The company is running a capital-heavy playbook (leasing lockers, securing locations, scaling density) in countries where:
customer behavior differs,
ecommerce penetration is uneven,
regulatory and landlord constraints slow rollout,
International Adjusted EBITDA margins today sit around 15%, far below the Polish 47%+ level. Bears believe these markets will never converge. In the UK market InPost has acquired Yodel, which is a turnaround business to whom it previously provided a life line debt. This debt has been turned into equity with the takeover. It also acquired Mendez, which has a newstrade segment, delivering newspapers and magazines. This division can be seen as a distraction.
Just today, InPost partnered with Austrian Post to enable Polish business customers to send parcels to Austria and Hungary. Another step towards a Paneuropean company, but likely not a huge boost to revenues.
Capex and depreciation depress economic profitability
As long as the network is expanding, adjusted EBITDA converts only ~55% to EBIT.
Bears interpret this as structurally low ROIC and a situation that won’t improve as growth CapEx slows.
Where the Bear Case Fails
I talked with a few people about InPost and dug deeper. Let’s talk about the bear points, projecting three cases for FY30 fundamentals and valuing the business.
Misunderstanding #1: Lockers are not a commodity
A locker is not a metal box that you just dump somewhere, although some competitors think that way. Utilization is everything and a successful networks needs:
high-traffic locations
broad geographic coverage
superior app + customer experience
loyalty programs
fast delivery (>99% next-day)
Competitors often deploy lockers into the same locations but fail to get utilization. This also shows in KPIs like total number of lockers owned by a provider or in a network. Allegro currently has 30k APMs, out of which just 6k are operated by Allegro One. 12k of those lockers are from DPD, which deploys many like the tiny one shown below. That’s very different than a 150+ compartment locker.
We often don’t have a like for like comparison here. Instead of lockers we should look at number of compartments, to understand better how much volume can be supported. Furthermore, such a network with several providers often has locations where multiple vendors are present. This does not provide any added value to customers and worst case it reduces convenience. Think about getting three packages from three providers within the same network, all delivered to different lockers. Without a unified and integrated software backend operations will be clunky and expensive.
Misunderstanding #2: EBIT margin expands naturally as growth capex normalizes
The narrative of peak Poland margins relies heavily on the argument of increased competition, as discussed in misunderstanding #1. This fails to capture that InPost currently is still in heavy reinvestment mode, also in Poland. While not directly comparable, below is a slide from Ashtead Group, a heavy equipment rental business. They are very different businesses, but both spend growth CapEx and then see increasing operating leverage over the years. For Ashtead this results in a EBITDA margin uplift for new locations from 41% in the first two years to 56% after the ramp up in the first five years.
For InPost we have a similar dynamic, in which locations get stronger margins over time, as the network grows and customers are accustomed to this location, driving utilization higher. The locker fleet has a long life. Once capex slows to maintenance levels, the adjusted EBITDA to EBIT conversion ratio rises meaningfully.
This dynamic is not priced in.
Misunderstanding #3: International business is not a low margin business
Right now, especially the UK business, is in heavy reinvestment mode. Margins are low and bears fear that the Polish success won’t be replicated. With the acquisitions of Yodel and Menzies, InPost accelerates its UK expansion significantly.
Yodel was bought out of distress, so there is a lot of things to handle. The business had hardly any automation at all and was struggling to satisfy demand in last years Christmas season. InPost is heavily reinvesting into automation and consolidating the infrastructure. They can run the company a lot more efficiently, but it will take time. Excluding Yodel, the UK business is at a 20% adjusted EBITDA margin. Thanks to the deals, InPost now is the #3 largest parcel delivery company in the UK. Utilization is over 80%, higher than in the Polish market. Once the accelerated reinvestment goes down margins will expand.
The Eurozone business is more profitable at over 14% adjusted EBITDA, but still not where it should be. The acquisition and integration of Sending as well as its to door business keep margins down. Over time, InPost wants to convert customers to its APM business through to door delivery.
FY 2030 Bear, Base and Bull Scenarios
I wanted to model three scenarios to see how much margin of safety is in the stock. I saw a fund letter with a bearish price target of around 6€, which I find ridiculous. Let’s see if the numbers support this.
Bear case
In the bearish scenario I assumed that revenues in Poland will grow with inflation at 3%, while International grows at a 10% pace, down from a current pace of >30%. Margins are collapsing in the Polish market due to high competition and pricing pressure. Continued reinvestment needs also keep EBIT conversion low at 55%. International the competition amplifies and the business never reaches a scale and sees margins collapse to 10%. Overall consolidated EBIT margins of 11.8% are much lower than today and drive a -19% to +71% performance over five years.
Base case
The base case sees 6% growth in the more mature Polish market and stable margins from positive scale benefits and lower growth CapEx, offset by pricing competition from Allegro and its network. Internationally the company continues to compound at 17%, driven by taking market share and strong reinvestment.
Margins stay flat in the Polish market and increase meaningfully internationally as the operating leverage of a dense network kicks in and high margin cross border parcels elevate margin profile. The path towards a Pan European Delivery network looks clear. Consolidated margins don’t improve as much, because of the faster revenue growth of the lower margin international business. Upside over five years comes out at 73-269%, depending on the EBIT multiple between 8-17x. Through lower growth CapEx EBIT revenue growth outpaces D&A, leading to operating leverage on EBIT and cash flows.
Bull case
In the bull case Poland continues to grow at 9% based on E-Commerce growth, Allegro failing to take meaningful market share and cross border parcels. Internationally can compound at over 20% based on its rapid expansion and becoming a dense network loved by its loyal customers.
Margins are improving in Poland through further consolidation and optimization of the network. International becomes increasingly similar to Poland and sees strong operating leverage as the Pan European thesis plays out.
Revenue far outpaces reinvestment through strong incremental margins by higher utilization in the lockers and cross border volume. EBIT grows disproportionally and EBIT margins exceed 25%. Over five years the upside is between 172-479%.
Summary
Bear Case: A business that stalls, faces real competition, and struggles to monetize its international footprint.
This yields modest EBIT growth and low multiples, but still a non-disastrous outcome.Base Case: Steady execution, no blow-ups, continued efficiency gains and a locker network that quietly compounds in value.
Bull Case: International markets prove out the same density effect Poland enjoys. Cross-border volumes expand and margins re-rate. The business becomes a quasi-infrastructure asset with recurring economics and low maintenance CapEx. The strong free cash flows can be returned to shareholders through high dividends or expansion into new geographies.
Why I Am Buying
The market prices this company as if:
Poland is saturated (it isn’t)
competition will erode utilization (unlikely)
international markets will never scale (ahistorical for network businesses)
margins have peaked (mechanically untrue given the D&A profile)
Instead, I see:
a deep cost advantage vs. traditional couriers,
a multi-country rollout that is still early,
very strong operating leverage,
a dominant NPS moat as a consumer love brand,
and a network that improves economically with each incremental locker, not each incremental parcel.
When you bake these dynamics into a multi-scenario model, the asymmetry becomes clear:
The bear case is survivable.
The base case is attractive.
The bull case is explosive.
The same can be observed in my IRR model, which highlights an asymmetric opportunity. InPost is a 10% position for me at the moment and I could see myself continuing to buy if prices stay as cheap.
