Financial Trading Blog
Stock of the day 06/06/2016 – Boohoo.com PLC
From the nadir that was the company’s shocking profit warning at the start of 2015 Boohoo has been on a near uninterrupted ascent, opening 2016 having gained back nearly all of the 40% in value it lost in that one day in January last year. Things continued to look good as the New Year got underway, the stock teasing 45p by the beginning of February as its post-Christmas update saw the company reveal sales swelled 49% to £73.7 million in the 4 months to the end of 2015.
The company couldn’t quite sustain that start of February high, a sharp decline across the first few weeks of that month (by no means a Boohoo-specific phenomenon) leaving the stock below that 45p mark until mid-April. Yet from this point onwards Boohoo really began to gain traction, rapidly rising to 50p for the first time since October 2014 as April came to a close.
(Source: IT-Finance.com 06/06/2016)
Securing that 18 month peak was Boohoo’s full year results: revenue rose by 40%, leaving the company’s just shy of £200 million, while pre-tax profit saw a similar 42% surge to £15.7 million. The cherry on top was a 34% jump in active customers, now sitting a sweet 4 million. Boohoo’s presence was felt around the globe during its last fiscal year, with a 38% rise in sales in the UK joined by a 25% increase in Europe and, most notably, a 56% jump across the rest of the world.
Since then Boohoo has continued to climb; a brief wobble at the end of April was soon overcome, before May saw the stock hit 53p. A recent reiterated ‘Buy’ rating from Jefferies Group helped add extra fuel to Boohoo’s fire, leaving the stock at a current trading price, and 26 month high, of 56.15p (IT-Finance.com, 06/06/2016).
Investors will be looking for Boohoo to confirm its first quarter trading continued at the same pace as it did last year, ensuring it has navigated the fashion sector’s issues better than its bricks-and-mortar peers M&S and Next.
Boohoo.com PLC has a consensus rating of ‘Buy’ with an average target price of 48.22p.
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