Could the Boohoo Group PLC share price be set to soar?

Does the Boohoo Group PLC (LON:BOO) (BOO.L) share price offer capital growth potential?




Boohoo
Boohoo

The long-term prospects for the Boohoo Group PLC (LON:BOO) (BOO.L) share price appear to be relatively positive in my view. I feel that the company could deliver improving financial performance, with it seeming to be well-placed to benefit from changing consumer trends.

One reason for this is its online focus. I believe that this provides it with an advantage versus bricks-and-mortar retail rivals. Its business rates are likely to be lower than for many of its high street rivals, and this could mean that it has a competitive advantage on price.

As well as this, Boohoo could benefit from the continued shift of consumers towards online. I feel that this evolution has not peaked yet, with the potential for improved technology and supply chains offering further appeal when it comes to shopping online. As a result, its EPS growth rate could remain high, with it expected to rise at a double-digit pace over the next two financial years.

Beyond that, I believe that the changes being made to the company’s management team could spur its financial performance higher. A new CEO may be able to provide a refreshed strategy, while current Co-CEOs remaining on the Board may create a stronger overall management team in my opinion.

Of course, Brexit could disrupt Boohoo’s financial performance in the near term. While it has been able to diversify into new markets in recent years, the UK remains a key region for the stock. But with a continued focus on customer service, price and innovation I believe that a PEG ratio of 1.6 may mean that the stock offers good value for money.

As a result, I’m upbeat about the company’s long-term prospects. In the short run there may be further uncertainty, but it could deliver stronger capital growth than many of its sector peers in future years in my opinion.




About Robert Stephens 5151 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email [email protected] or use one of the other contact methods available on the 'Contact Us' page