Boohoo is a leading online fashion retailer known for its trend-focused clothing and competitive pricing. Founded in the UK in 2006 by Mahmud Kamani and Carol Kane, Boohoo has carved a niche in the fast-fashion market.
Boohoo’s success hinges on its ability to deliver the latest trends quickly and affordably. The company now has 13 brands under its banner: Boohoo, Boohoo Man, PrettyLittleThing, Nasty Gal, MissPap, Karen Millen, Coast, Oasis, Warehouse, Debenhams, Dorothy Perkins, Wallis and Burton.
The current Boohoo CEO is John Lyttle. Boohoo shares are listed on the AIM market of the London Stock Exchange under the ticker symbol BOO.
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Boohoo EPS and Revenue Breakdown 2021-2024 (FY24 Ended February 29)
| Boohoo | Annual EPS | Annual Revenue |
|---|---|---|
| 2021 | 7.25p | £1.75 billion |
| 2022 | -0.32p | £1.98 billion |
| 2023 | -6.13p | £1.77 billion |
| 2024 | -11.48p | £1.46 billion |
Fashion Industry Comparison
Boohoo Share Price
The Boohoo share price has struggled significantly over the past few years. In 2020, the fashion company’s shares jumped above the 400p per share mark. However, it now sits below 40p a share, with headwinds including rising competition and declining sales having a major impact on its performance.
P/E Ratio Average Over the Last Ten Years: 37.4x (source: Finbox)
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Boohoo Forecast
Overall, the analyst view on Boohoo is split with four assigning the stock a Buy rating, five assigning it a Hold rating and six a Sell rating.
A View From The Bulls: Given the company’s challenges, recent bullish commentary is somewhat hard to come by, although we note that the current analyst consensus price target suggests around a 10% upside from current levels. While it seems the firm has since moved to a Neutral rating on Boohoo, analysts at Shore Capital said in an October 2023 note that they were upbeat on the company’s prospects. At the time, the firm stated that Boohoo’s financial standing “appears resilient,” adding that in their view, Boohoo “remains steadfast in its medium-term objectives.” These are “aimed at restoring growth and profitability,” said Shore Capital.
A View From The Bears: In an April research note, analysts at Deutsche Bank initiated Boohoo shares with a Sell rating and 27p price target. The investment bank told investors that it believes Boohoo needs to price more sharply and show differentiation of its product. If it is able to do that, Deutsche Bank feels it can stay in the game and protect its position in a highly competitive market.
Average Analyst Consensus 12-Month Price Target: 38.66p
Our View: The Boohoo challenges remain and it has yet to show signs that it has turned the corner. While it may be attractive for bargain hunters, they should first thoroughly research the risks.
Suitability
Boohoo presents an investment opportunity with a mix of potential rewards and risks. Here’s the type of investor that might find Boohoo shares attractive:
Boohoo has experienced recent challenges, including increased competition, declining sales and supply chain issues. However, the company still boasts a strong brand and loyal customer base. Investors comfortable with volatility and looking for a potential turnaround story with a long-term horizon may find Boohoo appealing.
The online fashion market continues to grow rapidly. If you believe Boohoo can navigate its current hurdles and capitalise on this trend, then the company’s shares could be a good fit for your portfolio.
Boohoo’s share price has fallen significantly in recent times. Value investors who believe the company is undervalued and poised for a rebound may find this an attractive entry point. However, careful research is crucial.
Boohoo has faced criticism regarding its labour practices and green claims. Investors who prioritise ethical considerations should carefully research these issues before investing.
Due to the company’s recent performance and the competitive landscape, Boohoo requires a high degree of research before investing. Understanding Boohoo’s future prospects and potential risks is crucial for making informed decisions.
