Yahoo Finance UK£0.35: That's What Analysts Think boohoo group plc (LON:BOO) Is Worth After Its Latest Results
It's been a good week for boohoo group plc (LON:BOO) shareholders, because the company has just released its latest yearly results, and the shares gained 2.1% to UK£0.35. Revenues were UK£1.5b, with boohoo group reporting some 2.8% below analyst expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for boohoo group
Taking into account the latest results, the current consensus from boohoo group's 16 analysts is for revenues of UK£1.52b in 2025. This would reflect an okay 4.2% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 79% to UK£0.024. Before this latest report, the consensus had been expecting revenues of UK£1.54b and UK£0.029 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a notable improvement in losses per share in particular.
The consensus price target fell 5.6% to UK£0.35despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on boohoo group, with the most bullish analyst valuing it at UK£0.75 and the most bearish at UK£0.19 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that boohoo group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.2% growth on an annualised basis. This is compared to a historical growth rate of 9.6% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.7% annually. Factoring in the forecast slowdown in growth, it looks like boohoo group is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of boohoo group's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on boohoo group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for boohoo group going out to 2027, and you can see them free on our platform here..
It might also be worth considering whether boohoo group's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
