boohoo.com Plc – Value Analysis (LONDON:BOO) : December 26, 2017

Capitalcube gives boohoo.com Plc a score of 79.

Our analysis is based on comparing boohoo.com Plc with the following peers – ASOS plc, Ocado Group PLC and N Brown Group plc (ASC-GB, OCDO-GB and BWNG-GB).

Investment Outlook

boohoo.com Plc has a fundamental score of 79 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • Compared to peers, relative underperformance last month is down from a median performance last year.
  • It currently trades at a Price/Book ratio of (12.86).
  • We classify BOO-GB as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
  • BOO-GB has relatively high profit margins while operating with median asset turns.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • BOO-GB‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • While BOO-GB‘s revenue growth in recent years has been above the peer median, the stock’s P/E ratio is less than the peer median suggesting that the company’s earnings may be peaking and the market expects a decline in its growth expectations.
  • The company’s level of capital investment seems appropriate to support the company’s growth.

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Leverage & Liquidity

  • Of the 3 chosen peers for the company, only 2 of the stocks have an outstanding debt balance. Companies with no debt include ASC-GB.

BOO-GB has maintained its Constrained profile from the prior year-end.

  • BOO-GB‘s debt-EV is its highest over the last four years and compares to a low of 0% in 2016.
  • Relative to peers, debt-EV fell 1.98 percentage points.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
ASOS plc 0 0.95 No interest exp 999
Ocado Group PLC 11.93 0.47 -3.55 38.96
N Brown Group plc 29.13 4.75 10.04 11.94
boohoo.com Plc 0.43 1.93 0 363.02
Peer Median 6.18 1.44 10.04 200.99
Best In Class 0.43 4.75 No interest exp 999

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Company Profile

boohoo.com Plc designs, sources, markets and sells own brand clothing, shoes and accessories for young, fashion conscious women and men, offering customers access to the latest, on-trend fashions across a range of boohoo branded, value orientated products. The company was founded by Mahmud Kamani and Carol Kane in 2006 and is headquartered in Manchester, the United Kingdom.

Disclaimer

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