Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on boohoo group plc (LON:BOO) due to its excellent fundamentals in more than one area. BOO is a company with impressive financial health as well as a excellent future outlook. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on boohoo group here.
Flawless balance sheet with high growth potential
One reason why investors are attracted to BOO is its notable earnings growth potential in the near future of 28%. Earnings growth is paired with an eye-catching top-line trajectory of 74%, which indicates a high-quality bottom-line expansion, as opposed to those driven simple by unsustainable cost-cutting activities. BOO is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. BOO's has produced operating cash levels of 10.84x total debt over the past year, which implies that BOO's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For boohoo group, there are three key factors you should further research:
- Historical Performance: What has BOO's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Valuation: What is BOO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether BOO is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of BOO? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.