Boohoo share price: here’s why I think now is a good time to buy shares

Jabran Khan details why he thinks now could be a good time to buy FTSE AIM Boohoo shares and discusses the recent Boohoo share price activity.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Online fast-fashion retailer Boohoo (LSE:BOO) has grown massively in the past five years. I think the FTSE AIM-listed share is currently priced low and believe now could be a good time to buy shares. Looking at the current Boohoo share price, I am tempted. I believe with recent acquisitions, Boohoo could be gearing up for the next stage in its growth journey. 

Fast fashion, faster growth

Founded in 2006, the UK-based online retailer has become hugely popular with its target market of 16-30 year-olds. It offers its own-brand fashion clothing and sells over 30,000 products across multiple brands.

Over the past five years, the Boohoo share price has risen due to the massive growth. To provide some perspective, net profit has grown from £8.4m in 2015 to £64m for 2020. Boohoo also benefited from the pandemic. Many traditional retail outlets closed their doors and Boohoo’s sales jumped. Boohoo has had a habit of buying failing labels and folding them into their business. This has allowed it to grow its brand and diversify its offering. Recent acquisitions include Debenhams, Warehouse, and Dorothy Perkins.

Should you invest £1,000 in Boohoo Group right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Boohoo Group made the list?

See the 6 stocks

Boohoo share price journey

In the past five years, Boohoo’s share price has increased by over 620%. The past 12 months has seen the Boohoo share price underperform in my opinion.

The Boohoo share price has been affected by allegations of poor working practices. It was accused of using dubious suppliers and the working conditions were reported to be controversial to say the least. In addition to this, competitors have begun to catch up to its growth. Furthermore, the pandemic has forced many traditional retailers to invest in their own online platforms.

Despite these negatives affecting the Boohoo share price, I do believe things are on the up. As I write this, Boohoo shares are trading for just under 350p per share. This is still nearly 8% higher than this time last month. I expect this upward trajectory to continue.

FTSE AIM opportunity

I believe the Boohoo share price is well priced enough to tempt me to invest. The reasons behind this are also linked to the next chapter of its journey. Boohoo is now in a position whereby it is no longer a startup. It possesses a market capitalisation of £4.5bn. This makes it one of the largest listed retail businesses in the UK and it is still only listed on the FTSE AIM. With this level of market cap, it must reach a certain level of maturity and conduct itself in a certain manner operationally. I believe this is happening.

One step it has taken to show me it has matured is that of cutting ties with controversial suppliers. In addition to this, it is investing heavily in warehousing and office spaces and is planning to open its own factory in Leicester. This new initiative will surely help it manage demand and take itself to the next level to fulfil demand related to its new acquisitions.

There is always going to be the spectre of mistakes made recently that could affect the Boohoo share price. In addition, competition will always be attempting to grow, which could affect Boohoo.

I am, however, optimistic about the long-term outlook for Boohoo and its investment viability and would buy shares at its current price. Another stock I like is Tesco — I think it could be another good opportunity.

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Jabran Khan has no position in any shares mentioned. The Motley Fool UK has recommended 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.

More on Investing Articles

Passive income text with pin graph chart on business table
Investing Articles

£11,000 in savings? Here’s how investors could use that to target an annual passive income of £12,892 over time!

Money put into high-dividend-paying shares with the returns used to buy more of them can generate potentially life-changing passive income.

Read more »

Investing Articles

Down 10% and 15% in a month! 2 cheap shares investors might consider buying with £2k today

It's always a good time to buy cheap shares! Harvey Jones picks out two FTSE 100 companies that have fallen…

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

Here’s how £350 a month could put a stock market beginner on the road to wealth!

Interested in getting a foot on the stock market ladder? Our writer breaks down the facts and figures so aspiring…

Read more »

BUY AND HOLD spelled in letters on top of a pile of books. Alongside is a piggy bank in glasses. Buy and hold is a popular long term stock and shares strategy.
Investing Articles

The 5 most popular FTSE 100 shares on the AJ Bell trading platform

Our writer’s been looking at the FTSE 100’s most bought stocks on one particular investment platform. And he’s heartened by…

Read more »

Young Black man sat in front of laptop while wearing headphones
Investing Articles

Why isn’t everyone aiming for £37m in stocks and shares?

It’s never too early to start investing in stocks and shares through a SIPP or ISA. Dr James Fox explains…

Read more »

Happy couple showing relief at news
Investing Articles

Here’s how much an investor needs in an ISA to generate a £27,500 second income

Imagine creating a second income that's the equivalent of the average post-tax salary in the UK. Dr James Fox explains…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

Here’s the Tesco share price forecast for the next 12 months!

Tesco's valuation has dropped to multi-year lows after recent share price weakness. Is now the time to consider buying the…

Read more »

Illustration of flames over a black background
Investing Articles

Just released: March’s higher-risk, high-reward stock recommendation [PREMIUM PICKS]

Fire ideas will tend to be more adventurous and are designed for investors who can stomach a bit more volatility.

Read more »