What do people think of Boohoo now?
The PE is trading at 50.2, which is lower than ASOS of PE of 80 and similar to Net a porter at 50.
Both are aggressive expanding into international markets which would contribute to the lower operating margins. Also with exchange easing on the UK market we should see some of the pressures reduce marginally.
For me I am looking to reenter at the current price. I currently do not own any Boohoo shares.
I like Boohoo and think the price is looking pretty reasonable now. I really don’t understand why ASOS is higher rated. I heard (probably on ADVFN) that some hedge fund started a short position on Boohoo on the basis that its margins were declining and it would soon need to start sourcing from other third parties to continue growth, which would make its margins decline further - or something like that. It sounded like a pretty weak short thesis anyhow but might explain why the recent drop is being protracted. Personally I’d wait for the price to bottom out before buying in as I think this gives a better reward to risk and I have many other fish to fry but I think it wouldn’t be crazy to buy in now.
