Financial Trading Blog

Stock of the day 20/04/2016 – Boohoo.com PLC



After online rival ASOS posted a blockbuster set half year figures last week, the pressure is on Boohoo.com to keep up the pace with its own preliminary results next Tuesday.


It hasn’t been the smoothest journey since Boohoo’s IPO in March 2014; starting its public career at 80p by the end of the year it was trading at around half of that. Things got even worse as 2015 got underway, an unforeseen profit warning causing the stock to plunge an eye-watering 40% to an all-time low of 22p. That warning meant Boohoo had to spend the next 12 months clawing its way back to its already reduced 2015 starting price, eventually entering 2016 at a still sub-par 37p.

Boohoo .com PLC Chart April 2016 Spreadex Financial Spread Betting
(Source: IT-Finance.com 20/04/2016)

However, after that solid year of re-growth Boohoo has begun to pick up the pace since the New Year began. The main catalyst for its renewed energy was its post-Christmas update, a far cry from the price-destroying statement seen the year before. For the final 4 months of 2015 sales surged a whopping 49% to £73.7 million, with the company stating that its full year performance would be ‘marginally above’ its previously stated targets.

Not that there weren’t a few issues in that update; international sales grew 63% compared to the 70% seen last year, whilst more worryingly Boohoo’s gross margins slipped by 2.9% thanks to the company’s sales-boosting discounting. However the stock nevertheless began to rise after that largely positive update, with a series of ‘Buy’ ratings from the likes of Jefferies Group, Shore Capital, Investec and Peel Hunt helping the company navigate the choppy start to 2016, surging all the way to a current trading price of 49p (IT-Finance.com, 20/04/2016).

Boohoo.com PLC has a consensus rating of ‘Buy’ with an average target price of 46.33p.

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