Boohoo Share Price Forecast | Boohoo a Good Stock to Buy? (2024)

By Capital.com News

Boohoo Share Price Forecast | Boohoo a Good Stock to Buy? (1)

Boohoo has contributed almost £2bn ($2.4bn) to the UK economy in Gross Value Added (GVA) since 2009. According to the company’s website, in 2020 to 2021 it spent over £300m in British businesses, which, in turn, supported nearly 5,000 jobs.

In 2020, Covid-19 induced global lockdowns saw many consumers switch to online shopping, leading to a boom for e-commerce retailers. On 19 June 2020, the BOO share price reached an all-time high of 413p. However, since then the price has corrected over 85% and last closed at 56.78p on 28 June 2022.

Boohoo Share Price Forecast | Boohoo a Good Stock to Buy? (2)

On 16 June, Boohoo released its Q1 trading statement for the three months ending 31 May 2022. Reporting a £445.7m in total revenues, the top-line reflected an 8% year-over-year (YOY) decrease.

Against the backdrop of a tough macroeconomic environment, what does the future of this fashion company look like? Join us as we dig into the company’s latest financial results, gather analyst insights on Boohoo share price predictions and outline a plausible Boohoo share price forecast.

Boohoo Q1 revenues

For the quarter ending 31 May, the top-line was reported at £445.7m, compared to £486.1m for the same period in last year. This reflected a fall of 8.31%. The company cited global supply chain issues and customer product returns amid rising inflation as reasons for the decline. However, while its performance has been adversely affected it continues to be in line with previous guidance.

The three-year pre-pandemic period suggests a 75% increase in revenues. This is primarily driven by the multi-year market share gains across Boohoo’s platform.

A closer look at the company’s revenues by region shows that the biggest losses were experienced in its US business. US revenues fell from £131.9m in Q1 FY 2022 to £95m in Q1 FY 2023, making for a 28% pullback.

Owing to logistics challenges, deliveries have been severely affected, taking significantly longer than in pre-pandemic times. However, with Boohoo’s first distribution facility in Pennsylvania going live mid-2023, the company aims to launch a one-day delivery proposition in key areas of the US market.

Boohoo Share Price Forecast | Boohoo a Good Stock to Buy? (3)

Despite a 1% fall in UK revenue, Boohoo reported month-on-month increases. As a result of efficient product pricing, underlying gross demand continued to be upwards of 21%.

A 15% quarterly revenue increase was seen in the company’s rest of the world segment. Wholesale partnerships that Boohoo has developed over the years have boosted increased sales in this area.

Boohoo Share Price Forecast | Boohoo a Good Stock to Buy? (4)

Boohoo makes progress toward its strategic priorities

In its final results for the year ended 28 February 2022, Boohoo set a series of strategic priorities to bounce back in the post-pandemic market. During its earnings call for the Q1 trading update, CEO John Lyttle said the company was continuing to make progress toward optimising its operations and having a meaningful impact on the group.

Reporting a 10% YOY increase in the short-lead time product mix, Boohoo continues to increase sourcing from the near-shore markets to reduce its exposure to elevated inbound freight costs.

With conscious efforts made to tightly control inventory, lower stock levels have been observed. Boohoo’s automation project at its Sheffield distribution centre is set to go live in the second half of the financial year.

Boohoo guidance for FY 2023

In its guidance for the year ending 28 February 2023, Boohoo made no changes to its previous outlook. With improved growth rates anticipated in alignment with normalising consumer demand, the company expected its overall revenue growth to be in low-single digits.

By accounting for high-inflationary conditions, international competition and supply chain issues; Boohoo expects the adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) margins for the year to lie within the range of 4% to 7%.

Commenting further on the company’s future prospects, Lyttle said:

“Looking forward, we will continue to focus on optimising both our financial and operational performance to ensure the business is well placed to take advantage of future growth opportunities.”

Boohoo partners with CottonConnect

Boohoo recently announced its partnership with CottonConnect in Pakistan, working with Responsible Environment Enhanced Livelihoods (REEL) cotton to leave a lighter carbon footprint.

The company plans to launch a sustainable range powered by 2,500 trained farmers through CottonConnect’s value chain management. With better education to farmers regarding the benefits of sustainable production methods, they expected higher yields and enhanced net income which would further elevate their quality of lives.

Director of Responsible Sourcing & Product Operations, Andrew Reaney said:

“We are delighted to be partnering with CottonConnect and the individual farmers in Pakistan. I have been able to see the project first-hand and the benefits the CottonConnect program provides, including in-depth training, a better yield of cotton, lower costs, and environmental benefits. We are committed to supporting the farmers and it is only year one of this partnership, we are looking forward to seeing what the future holds.”

Boohoo share price forecasts and analyst insights

Boohoo Share Price Forecast | Boohoo a Good Stock to Buy? (5)

Factoring in the competition by other fast fashion groups, Third Bridge senior analyst Harry Barnick said:

“Our experts say Boohoo will have to find creative ways to reduce costs. Improving purchasing costs through fabric consolidation and production locations are key to the success of this cost reduction strategy.

“Shein could take market share from Boohoo in the UK market given its broad offer and attractive price position.”

Milan Vaishnav, CMT, MSTA, a consulting technical analyst at Gemstone Equity Research & Advisory Services, shared his technical opinion on BOO share price forecast:

“After marking successive lower tops at 433, 402 and 378, BOO has kept itself under a firm bearish group and is presently oversold on the weekly charts. Weak stocks tend to remain oversold for a prolonged period; merely being oversold is not a reason enough to buy. Presently, it is best to avoid this stock; it is best recommended that one waits for some signs of a potential bottom in place before making an entry in this stock.”

As of 29 June, algorithm-based forecasting service Wallet Investor was bearish on the stock. In its Boohoo share price forecast for 2022, the service anticipated the BOO share price to close at 0.000000066 by December. Beyond that, it expects the price to be 0.000001, restricting the ability to provide a credible Boohoo share price forecast 2025.

In a Boohoo share price prediction by Tip Ranks, four out of 13 analysts rated the BOO stock a ‘buy’, seven suggested to ‘hold’ and two recommended a ‘sell’ Their consensus 12-month price target was 89.92p, with a possible low of 45p to a high of 140p. The current analyst price target consensus had an upside of 58.37% from the last price of 56.78p as of 29 June.

When looking at analysts’ BOO share price forecast keep in mind that these predictions could be wrong. Your decision to invest or not should be based on your attitude to risk, your expertise in this market, the spread of your portfolio and how comfortable you feel about losing money. There are no guarantees. Markets are volatile. You should conduct your own analysis, taking in such things as the environment in which it trades and your risk tolerance. And never invest money that you cannot afford to lose.

FAQs

Boohoo Share Price Forecast | Boohoo a Good Stock to Buy? (2024)

FAQs

Is it a good time to buy Boohoo shares? ›

Currently, the stock is trading on a lowly price-to-sales multiple of 0.28. Therefore, if boohoo can return to double-digit growth and rebuild profitability, I think the share price could rise substantially. This might justify risk-tolerant investors who are eyeing a big turnaround considering a small position.

What is the forecast for Boohoo shares? ›

BOO Stock 12 Month Forecast

Based on 5 Wall Street analysts offering 12 month price targets for boohoo group Plc in the last 3 months. The average price target is 40.00p with a high forecast of 70.00p and a low forecast of 26.00p. The average price target represents a 16.89% change from the last price of 34.22p.

How do you know what is a good stock to buy? ›

Metrics like earnings growth, price-to-earnings (P/E) ratio, and profit margin can potentially help isolate possible danger signs for a stock. Traders often compare a stock to its sector and see how it's doing compared to other stocks.

Is my size a good stock to buy? ›

My Size has received a consensus rating of Buy. The company's average rating score is 3.00, and is based on 1 buy rating, no hold ratings, and no sell ratings.

Will Boohoo shares ever recover? ›

Fundamental analysts are rating Boohoo as a 'hold' with Refinitiv data showing 2 strong buy, 3 buy, 10 hold and 6 sells - with the mean of estimates suggesting a long-term price target of 47.26 pence for the share, roughly 49% above the share's current price (as of 02/10/2023).

Why is Boohoo stock falling? ›

Fast fashion online retailers have experienced well-documented struggles with sales since the pandemic, and Boohoo is no exception. Revenue for the 2024 full year plummeted 17%. The company has blamed macroeconomic conditions, but the problems may run much deeper than external economic factors.

Is Boohoo doing well? ›

Boohoo has cut more than 1,000 jobs and dived into debt after its losses soared and sales slumped 13% amid heavy competition from the Chinese online seller Shein and the revival of the high street after the pandemic lockdowns.

How profitable is boohoo? ›

In the year ending February 28, 2023, the Boohoo Plc. group accumulated a gross profit worldwide of approximately 985 million British pounds. This represented a slight decrease from the previous year.

Will Boohoo pay dividends? ›

boohoo group Plc (GB:BOO) does not pay a dividend.

What are the top ten stocks to buy right now? ›

Sign up for Kiplinger's Free E-Newsletters
Company (ticker)Analysts' consensus recommendation scoreAnalysts' consensus recommendation
Nvidia (NVDA)1.31Strong Buy
Amazon.com (AMZN)1.32Strong Buy
Emerson Electric (EMR)1.32Strong Buy
Microsoft (MSFT)1.33Strong Buy
19 more rows

Which company share is best to buy today? ›

Buy rated by analysts
Stock NameCurrent PriceBuy Rating Perc
Suzlon Energy Ltd₹53.05100
Havells India Ltd₹1887.0548.57
Astral Ltd₹2273.6554.55
Bharti Airtel Ltd₹1416.0570.59
2 more rows

How do you know when it's a good time to buy stock? ›

Timing the stock market is difficult, but understanding when to trade stocks can help your portfolio. The best time of day to buy stocks is usually in the morning, shortly after the market opens. Mondays and Fridays tend to be good days to trade stocks, while the middle of the week is less volatile.

What's a good amount of stock to buy? ›

The more equities you hold in your portfolio, the lower your unsystematic risk exposure. A portfolio of 10 or more stocks, particularly those across various sectors or industries, is much less risky than a portfolio of only two stocks.

How do you know if a stock is worth buying? ›

Evaluating Stocks
  1. How does the company make money?
  2. Are its products or services in demand, and why?
  3. How has the company performed in the past?
  4. Are talented, experienced managers in charge?
  5. Is the company positioned for growth and profitability?
  6. How much debt does the company have?

How do you calculate if you should buy a stock? ›

The most common way to value a stock is to compute the company's price-to-earnings (P/E) ratio. The P/E ratio equals the company's stock price divided by its most recently reported earnings per share (EPS). A low P/E ratio implies that an investor buying the stock is receiving an attractive amount of value.

Why is Boohoo struggling? ›

The group, like rival Asos, thrived during the pandemic-driven boom in online shopping, but as consumers returned to high street shops, it has faced a succession of challenges including supply chain issues, inflation, and more product returns.

Is this the best time to buy stock? ›

The opening period (9:30 a.m. to 10:30 a.m. Eastern Time) is often one of the best hours of the day for day trading, offering the biggest moves in the shortest amount of time. A lot of professional day traders stop trading around 11:30 a.m. because that is when volatility and volume tend to taper off.

When should I buy my shares? ›

When should I buy shares? This may come as no surprise for you, but there's no right or wrong time to buy shares. In fact, it's not so much about when you buy stocks and shares, but rather what you decide to purchase. Because you want to make money, you need to buy shares that are likely to go up in value over time.

Why is boohoo so cheap? ›

Overseas Production: Like many fashion brands, Boohoo manufactures its products in countries with lower labor and production costs. This can lead to lower manufacturing expenses, which are reflected in the pricing. Economies of Scale: Boohoo operates on a large scale, which means they produce a high volume of clothing.

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