Boohoo share price has dropped by a fifth in the last year, but it has started to rise again since last week. The surge may or may not continue but it provides investors hope of a possible reversal of the long-term trend. That makes it excellent news for the stock price.
Accounting books shows the company on the right track
Due to the recent share price decline, the price-to-earnings ratio for Boohoo is currently 23. The company has debt of £409.3 million due for payment within the next year. It also has liabilities of UK£52.0 million due for payment beyond that time period, according to the most recent balance sheet. However, it has cash worth £148.4 million and receivables totaling £41.0 million that are scheduled to be received within 12 months.
As a result, the company’s total liabilities exceed its cash and short-term receivables combined by £ 271.9m. Therefore there isn’t much reason to anticipate these obligations will be a problem for Boohoo . This is especially true, given its market value of about 2.3 billion.
Recovery strategy paying off
Boohoo has had a rough go of it lately. Sales have increased significantly, but the company’s profit margins have been squeezed. According to its latest earnings report, sales rose by 5 percent, indicating that the retailer’s growth strategy is still working. Supply chain problems have tarnished the corporation’s image recently. However, the turnaround plan employed by the company is not inherently unrealistic.
Technical analysis for Boohoo share price
The Boohoo share price pattern suggests an impending formation of an ascending scallop, which suggests bullishness. The bullish sentiment is further supported by the MACD line’s crossing of the signal line over the last 24 hours. If the buyers support the trend, they could push the price to the first resistance at 205.7, beyond which the next resistance could be at 213.6.
However, the RSI is at 37, which suggests a generally weak momentum that could lead to bearishness. This could pull the price down to the first support at 192.7 and the second support at 177.5.