£10-20Bn mkt cap company in 5-10 yrs - Paul Scott Stockopedia says14 Jan 2020 14:25
A brief comment to flag that there's yet another sparkling update out today from this online fashion multi-brand empire.
It now has multiple brands, which is a brilliant strategy - each one having the group expertise in design, buying, marketing, IT, logistics, etc, applied to it. So far they've all worked. Brands within the group are now: BooHoo, PrettyLittleThing (part owned by the founder's son), Nasty Gal, MissPap, Karen Millen & Coast. Note that the last 2 are targeting an older demographic from the traditional cheap & cheerful youth market.
Sales are strong internationally too.
With multiple brands (more are likely to be added), and a global market, the sky's the limit for this group, in my view. It guides that growth is expected to slow to c.25% in future, as it gets bigger. Still remarkable.
EPS for FY 02/2020 is nudged up 4% today to 5.43p - giving a PER of 61 times - expensive. Or is it? Given that FY 02/2021 is starting shortly, then we should value it on a multiple of forecast 6.75p EPS, reducing the PER to 49 times. Still expensive? Less so, but also bear in mind that BOO tends to beat forecasts. Factor that in, and the PER might be nearer say 40 in reality. That could easily drop to say 25 or 30 times the following year. Which would make it good value for a company with such strong growth & global markets.
BOO is clearly a big long term winner. I'm sorely tempted to buy back in actually, because if we think forwards say 5-10 years, then how many more failed High Street brands will BOO have hoovered up & transformed online? International sales are only scratching the surface of large markets. This could be a £10-20bn mkt cap company on that type of timescale.
I'll wait for a pullback, and then buy back in at some point in 2020.
https://app.stockopedia.com/content/small-cap-value-report-tue-14-jan-2020-flo-mcb-boo-gtly-wjg-d-4-t-4-dfs-gaw-547021?order=createdAt&sort=desc&mode=threaded
Sign In
Follow the stocks
