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bigmac81 - read in full a number of times and learn how the share price of at least £36 in 10 years is calculated.

Estimate of the Intrinsic value price of a Boohoo Share.

1) 5 year EPS growth rate estimate from yahoo finance (analysis page) is 29.9% per year. From the balance sheet we can see that equity has grown from 85.5million in 2015 to 569 million in 2020. That is 46% per year compounded growth.

2) The 5yr historic PE from MSN Money price ratios is High of 70.86 and low of 37.69 is 52.7 average.

3) Current EPS (TTM) is 5.3p x growth rate 1.3 x 10 yrs = 69. Therefore the estimated EPS is 69p in 10yrs.

4) The earnings per share of 0.69 x the future PE of 52.7 gives a share value in 10 yrs of £35.88.

5) If you take 15% profits year on year from this sum you achieve a current fair price of £7.71

6) discount this by 50% for a margin of safety purchase price of £3.85. Basically you can buy this all the way up to £3.85 and still get a fantastic bargain.

I have run this calculation on a multitude of companies, and none meet the criteria. If you can find any companies with a solid history of exceptional trading like Boohoo that have lost substantial value through no real fault then please let me know of them.

So buy Boohoo share price up to £3.85 for a fantastic bargain, Boohoo share price will be £8 to £10 in two years time according to Paul Scott and at least £35.88 in 10 years time according to the calculations above.

bigmac81 - Paul Scott says Boohoo share price will be £8 to £10 in two years and not mystic Meg.

Read the Paul Scott comments in full a number of times. It's so worth the effort to do this.

All in all, Boohoo is looking very exciting in my (long term) view. Obviously as always, please DYOR, as you should know by now that I do sometimes get a bit over-excited. I think the facts justify it with BOO though.

As mentioned above, the broker forecasts are clearly looking too low again. So more upgrades likely, which is the trend, as you can see below. Hence why the PER is actually a good bit lower than people think it is, because they're using overly pessimistic forecasts.

As an aside, wouldn't it be nice just occasionally, if short sellers would come forward and say, "Sorry, I got it wrong". They never do that, do they? Which undermines their credibility next time.

The consensus figures are well below Zeus's upgraded forecasts yesterday, which are now 8.22p and 11.37p for the two years above. Hence expect the Stockopedia graph to show further progress upwards, as increased broker estimates start to feed through in the coming days/weeks.

Boohoo's house broker has pencilled in 11.37p there, which again is likely to be too low, because BOO normally exceeds forecasts. The Directors have a track record of under-promising, perhaps because they got caught out soon after listing, missing over-ambitious (short term) growth targets. Since then, they've been more prudent.

My view is that we can probably bump up the forecast for FY 02/2022 to at least 12p (I wouldn't be surprised if actual is nearer 15p, but lets leave some upside for another day). What sort of multiple should BOO trade on? Given the unique nature of the business model, and ongoing growth from bolting on more & more brands, then I think anything under 40 is missing the point. Here are some options;

PER 40: 480p per share
PER 50: 600p per share
PER 60: 720p per share
PER 70: 840p per share

In that context, I reckon the current share price of c.370p looks unrealistically cheap - a PER of 31

For that reason, I'm increasing my position size. Did I make a mistake in selling some between 306-320p recently (as discussed here)? Well obviously, yes, because the price is now higher. However, at the time, my decision was logical - I was worried that the supply chain review would be negative (which it was, but not catastrophically so), and I didn't know how the company was trading.

Now however, I am happy that the supply chain issue is dealt with, and we've just had bang up-to-date trading news, showing that the company is trading tremendously well. With this fresh information, combined with my assessment above that the share is looking undervalued, then I'm very happy to buy back my previous shares at c.370p.

As a reader commented, a legal action against the company in the USA is a potential thorn in the side, but it wasn't mentioned by anybody in the Q&A in yesterday's webinar, so clearly it's not bothered any of the analysts.

EDIT: I've made some enquiries about the US legal action, and can't print the actual reply, but translating it am told that it's not a problem at all. Would be good to get some independent confirmation of that though, which I don't have. End of edit.

Overall then, my current view on BOO is more bullish than before, and I reckon the shares look great value, for a unique growth business. Maybe investors are starting to realise how incredibly ambitious the team at BOO is. They see this being a huge, global business in the future. A few years ago they told me it could be a £5bn revenues business in the long term. Now they're talking £10bn, £20bn as possibilities. Hence why I'm inclined to keep buying, and to sit tight on them, almost irrespective of valuation. I've never looked at any share like that before, but this one justifies it, I reckon.

Also I'm hearing that the newish CEO (ex Primark) is very highly regarded, and seen as a very successful hire.

Paul Scott was a Finance Director for UK clothing retailers before he left to become a private investor and write for the likes of the small cap value report on Stockopedia. Paul Scott holds shares in Boohoo. Here is Paul's opinion on Boohoo today:-

In case you missed it, the recording of yesterday's webinar.

I find that it's useful to take photos on my phone, of the most interesting slides, and to make paper notes of the key points in webinars, because sometimes the links to webinars don't last very long - they can be taken down for various reasons, including commercial sensitivity.

For me, the key points are that the supply chain issue is being taken very seriously indeed, and the action being taken is so comprehensive, that it's clearly not just a PR exercise. Mistakes were made, and they're dealing with it. That's fine, end of story. I see some journalists are desperately trying to string out the story today, but they're wasting their time (and ours).

There were numerous other insights into sourcing, margins, and how BOO is managing & expanding the newly acquired brands. All in all, essential viewing for all investors who want to profit from a unique growth business.

Are the shares expensive now? Clearly the share has recouped nearly all the losses from the shorting attacks & supply chain issues. However, it's earnings that matter, and the adjusted diluted EPS of 4.53p at the interim stage indicates to me that this full year FY 02/2021 could be heading for 9-10p EPS.

The house broker issued an update note yesterday, forecasting only 8.22p for FY 02/2021, which strikes me as far too low, since it implies a drop in EPS from 4.53p in H1, to 3.69p in H2. H2 earnings down 19% on H1. Really?! Why would that happen?

This is what actually happened in recent years (numbers are all adjusted diluted EPS);

FY 02/2020: H1: 2.91p, H2: 2.97p (2% rise from H1 to H2)

FY 02/2019: H1: 1.99p, H2: 2.16p (8.5% rise from H1 to H2)

As you can see, H2 earnings have tended to be up on H1, not down. Therefore it looks to me as if the 8.22p EPS forecast from Zeus is probably too low. It says as much in yesterday's note;

Management guidance for the full year reflects highly prudent assumptions on consumer spending, normalising return rates, ongoing distribution cost inflation and increased marketing spend.

H1 FY20A has already delivered 50.7% of our full year revenue forecast and 55.9% of our full year EBITDA assumption with H2 growth targets appearing undemanding.

We see clear upside risk to our numbers should the trading momentum seen YTD continue. This backs up my view that 9p+ adj EPS for this year is probably more realistic.

Should we value the share on this year's earnings? Probably not, given that the stock market is supposed to look at least 6 months ahead, then we should be valuing BOO on FY 02/2022 figures.

Lmeng10 - also, you get the de rampers, people who want to panic holders to sell their shares, the share price goes down even further, then they can buy the shares cheaper from the people who have panicked and sold. On the opposite side you get the rampers who want to push the share price up, so they can sell their shares at a higher price. It's all a game for them. Hence why you must always do your own research and don't let chatboards like this panic you one way or the other.

Lmeng10 - a share price suddenly drops because of the herd mentality. Share price goes down, people panic and sell. Same the other way for the herd mentality, share price goes up, people chase it and it goes up further. This is what happens with shares. It's never rational. Best to learn to ride the waves, like surfing. Boohoo is a great growth share and the only great growth share on the UK market.

Buy up to £3.85 for a fantastic bargain, Boohoo share price will be £8 to £10 in two years and at least £36 in 10 years.

Where do your beliefs and opinions come from? If you're like most people, you feel that your convictions are rational, logical, and impartial, based on the result of years of experience and objective analysis of the information you have available.

In reality, all of us are susceptible to a tricky problem known as a confirmation bias. Our beliefs are often based on paying attention to the information that upholds them—while at the same time tending to ignore the information that challenges them.

GreenandRed - great contribution for your first post.

I bought 360,000 Boohoo shares in 2015 for £100,000. I bought them in my ISA. I had the money already in my ISA to buy them. I have held them ever since. I've watched them go up and down. When they've gone down, they've always come back higher and stronger. I'm not interested in trading, been there, got the t shirt and found out the only way to make the big money is to find great growth shares like Boohoo, buy them and hold them for 10 years plus. Boohoo is the only real great growth share on the UK markets. I will be holding them for at least another 10 years and probably longer. Warren Buffett, the share billionaire , said never buy a share that you wouldn't hold for 10 years.

Buy Boohoo up to £3.85 for a fantastic bargain. Boohoo share price will be £8 to £10 in two years and at least £36 in 10 years.

mickymix - great observation skills on the webinar update yesterday, well done you for studying it again, I was so busy listening to the questions and answers yesterday that I didn't think to look at the reactions on their faces. That's a lesson learnt for me, I will certainly be looking at their faces in future for clues and studying the webinars afterwards. Thank you for sharing that.

This is the herd mentality at its best i.e. see the price go down, panic and sell.

boohoo group plc (BOOH:LN) (BHOOY) PT Raised to GBP p 460 at Goldman Sachs

On 25 September 2020 Boohoo price target was raised to 460 GBp from 345 GBp at Goldman Sachs. Goldman Sachs analyst Richard Edwards raised the firm's price target on Boohoo to 460 GBp from 345 GBp and keeps a Buy rating on the shares after the company released the findings of the independent review, the purpose of which has been to consider the company's obligations and duties of care in relation to the workforce in its Leicester supply chain. Edwards said that while many lapses were identified by the committee in the plan, Ms Levitt QC was satisfied that the company did not deliberately allow "poor" working conditions and low pay to exist within its supply chain, it did not intentionally profit from them, and its business model is not founded on exploiting staff in Leicester. The analyst added that this news provides greater clarity into Boohoo, noting that the company is expected to maintain a "significant" presence in the Leicester garment industry.

DavidLaw - Let Boohoo marketing know about this with an email to them at marketing.comms@boohoo.com Worth a try.

Boohoo share price will be £8 to £10 in next couple of years and at least £36 in 10 years. Buy Boohoo shares up to £3.85 for a fantastic bargain.

I have held Boohoo since 2015 through every up and down. I have watched Boohoo come back from every down to go higher and stronger. I will be holding Boohoo for at least another 10 years. Onwards and upwards Boohoo.

gggg21 - excellent points. USA distribution centre to be decided in few months. Plus Boohoo are looking at buying failing brands in Europe and USA.

DavidLaw - maybe you could drop an email to Boohoo marketing about the problem.

Boohoo is the best UK growth share out there. Buying it up to £3.85 is a fantastic bargain. Share price will growth to £8 to £10 in next couple of years. In 10 years Boohoo share price will be at least £36.

During the Boohoo webinar, it was stated that September 2020 growth has been excellent too.