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Is this a good time to buy Boohoo shares?

Is this a good time to buy Boohoo shares?

Is this a good time to buy Boohoo shares?

The share price of Boohoo (LSE: BOO) the online fashion retailer is still under £1. Is this a good time to buy Boohoo shares?

Share price and investor’s views

The BOO share price is on a steady climb from its low 60 pence price earlier this month (March 2022) The stock is down today, however if you look at the 1 month share price chart, you can see that BOO has generally held ground above 90 pence.

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Investors will be happy that the share price is on the rise. Moreover, those investors who loaded up buying more shares when the price was in the 65 pence range.

The share price is trading just over 86p this morning (25 March 2022) and I think that’s fair value. It is fair value if you are going to buy the stock to hold for the long-term.

BOO shares are down by -75% over the past 12 months. If I had more free cash, I might very well be adding to my position in BOO.

The BOO share price is clearly undervalued and if you can see the stock recovering, the logic thus screams that this is a great buying opportunity.

The company does have its issues to overcome. Given it does sort those out, then the future growth of this company could be huge.

Earnings

Earnings are up year on year, and BOO are in the process of a restructure to deal with faster deliveries, from its storage locations to customers.

It’s easy to see a steady share price growth over the next 5 to 10 years.

The BOOHOO Booster

BOO could be bought out. And in any bidding war, the share price could rocket, back to fair value, moreover if BOO can speed up its fixing of the issues that has held it back.

At this stage, to me, fair value is £2.50. Consider that ASOS had experienced issues and sorted them, BOO could also recover and sail into better waters.

Issues being addressed

Aside from the speed of deliveries and sorting out its returns. BOO is in the process of putting right the ‘below minimum wage’ scandal in relation to the people who make its garments. This gave it bad press in 2020.

Worries

I’m not worried about increasing interest rates. All things being equal, every company is going to have its issues. Spring is upon us, and BOOHOO, I believe will profit from increased sales over this Spring and indeed for its summer collection.

Pros

Even during hard times, those in their 20s-40s and moreover teenagers are big spenders in fashion. And BOOHOO’s range of clothes are just the fit for the fashion-conscious.

Is this a good time to buy Boohoo shares?

I believe it is, if you can handle short-term dips. The long-term I feel holds better share price value. Online fashion retail is still in its infancy. The business model is growing and there is huge growth prospects.

BOO has had its issues, but it is a well-known online fashion retailer. BOO have established themselves as a serious player in the online fashion business and have the backing of the younger generation.

Marks and Spencer sell clothes as well as food. I don’t see any reason why BOOHOO couldn’t also create a food and drink range.

If BOO did, and this business model paid off, as it is for MKS, I think we would be looking at a BOO share price north of £5

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