Will the Boohoo share price recover in 2021?

Will the Boohoo share price recover in 2021?

July 5, 2021 jwrsymrmnutl 0

first_imgWill the Boohoo share price recover in 2021? Our 6 ‘Best Buys Now’ Shares I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. See all posts by Rupert Hargreaves Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended ASOS and boohoo group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Rupert Hargreaves | Friday, 18th June, 2021 | More on: BOO Image source: Getty Images center_img Simply click below to discover how you can take advantage of this. One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas?Grab this FREE report now.Inside, you discover one FTSE company with a runaway snowball of profits.From 2015-2019…Revenues increased 38.6%.Its net income went up 19.7 times!Since 2012, revenues from regular users have almost DOUBLEDThe opportunity here really is astounding.In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer?You could have the full details on this company right now. The Boohoo (LSE: BOO) share price has fallen nearly 19% over the past 12 months. Over the same period, shares in the company’s online fashion peer, Asos, have increased in value by 40%. This means shares in the former have underperformed those of the latter by 59%!The question is, will the stock turned things around in the second half, or is the company going to continue to underperform?5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…The Boohoo share price outlookIt’s impossible to predict what will happen to share prices in the short and long run. However, in theory, a stock price should track a company’s underlying fundamental performance. Therefore, if Boohoo’s profits grow, the stock price should also rise, although this isn’t always the case. Indeed, over the past 12 months, Boohoo’s fundamentals have improved dramatically. Sales increased 41% year-on-year for the group’s financial year ended February. Meanwhile, profit before tax increased 35%, and adjusted earnings per share jumped 47% to 8.7p. Boohoo has been one of the pandemic’s big winners. Consumers have flocked to its online offer as brick-and-mortar stores have been forced to shut. Management has used some of the windfall profits to buy some struggling brands, increasing is offer further still. It looks as if the corporation is firing on all cylinders. But the Boohoo share price has still struggled. StrugglingI think there are two primary reasons why. First of all, last summer, the company was hit by evidence of labour abuses among its UK suppliers, including paying workers far below the minimum wage.While the enterprise has tried to rectify these issues with an investigation and cutting ties with specific suppliers, it seems there’s still a cloud hanging over the business. Secondly, the stock looks a bit pricey. It is trading at a forward P/E ratio of around 46. This could be sustainable if the company’s growth continues, but that’s not guaranteed.As the economy reopens, consumers may return to brick-and-mortar stores, leading to a growth slowdown at the business. This could hurt the Boohoo share price. Uncertainty prevailsAll of the above suggests to me that the outlook for the Boohoo share price is quite uncertain. The company’s growth is impressive, but if growth slows, then the stock looks expensive. What’s more, it could take some time for the digital retailer to rebuild trust with its investors. That said, I’m incredibly encouraged by the group’s impressive growth, portfolio of brands, strong balance sheet and online operation. I think these qualities will help the business prevail over the next few years.As such, while I think the outlook for the Boohoo share price remains uncertain, over the next few years I think there’s a strong chance its profits will continue to increase.And as profits continue to increase, the company’s stock price should reflect that. On that basis, I’d buy the stock for my portfolio today as a buy-and-hold growth play.  Enter Your Email Address Grab your free report – while it’s online.last_img

 

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