I like to check in with the boohoo.com (LSE: BOO) share price from time to time.
Maybe it’s like a car crash thing, but I can’t resist seeing just how much money I lost on it over the past few years. Then again, I have a nagging feeling that it might one day take off again without me.
And looking now, I’m thinking it might have just started. So far in December 2023, the price is up 20%!
Seasonal rush?
I wonder if people are looking at stocks like boohoo in the run up to the Christmas holiday?
I see ASOS shares are up in December too. And Marks & Spencer has continued its strong run, more than doubling over the past 12 months.
The last update we had from boohoo wasn’t the kind of thing I’d expect to kick off a new bull run. Revenue in the first half of the year was down again, and the firm recorded a pre-tax loss.
To be fair, nothing much was expected just yet as the company is still working on its turnaround plans. And CEO John Lyttle did say that “over the first half we have made substantial progress across key projects and initiatives“.
Attractive outlook?
The board reckons it should post between £58m and £70m in EBITDA for the full year. But forecasts don’t seem to have changed much in the past few months.
The analyst consensus still seems to be bang in the middle between buy and sell. And they still expect to see losses per share until at least 2026.
So it looks to me like we’re just seeing a change in sentiment right now. But it might be justified.
Some love for retail stocks?
After all, investors don’t seem to have fully warmed to retail businesses again yet — though they might be starting to.
Inflation has kept a lot of us away from shopping, but it’s easing.
And despite the stern face on Bank of England Governor Andrew Bailey, just about everyone expects interest rates to fall in 2024. Perhaps not too far into the year.
What it means
So what does this all mean to me?
Well, I still see a whole load of uncertainty here. I really can’t work out any kind of stock valuation for boohoo right now.
And I don’t see a need to risk cash on companies that aren’t likely to be profitable for another few years.
Not when there are so many today that are raking in the cash and paying good dividends, while their shares are cheap.
Growth stock buy?
The boohoo shares I bought have dwindled to near nothing in value now. I don’t buy growth stocks very often, and I’ve noted boohoo down just as one that went bad and moved on.
But for growth investors with a long-term outlook? I think this might be a good time to get in.
Just remember, folks — shares are for life, not just for Christmas.
