Boohoo (LSE:DEBS) is a FTSE AIM stock that’s reinventing itself like a fading popstar. Legally, the company remains Boohoo Group, but it now trades as Debenhams Group and uses the stock ticker DEBS.
Meanwhile, the original Debenhams, which operated the physical department stores, has long been dissolved. So a name that was synonymous with the high street is now the corporate identity of an online fashion retailer.
The company itself is also undergoing a transformation, from fast fashion firm pumping out high volumes of clothes to a capital-light platform. In other words, it’s now hosting an increasing amount of third-party brands across the sites.
Investors appear to be warming up to the pivot, with the stock near 23p, a more than doubling from 10p in November. That still leaves long-term shareholders nursing a 93% loss over five years, but every turnaround has to start somewhere.
Here, I want to look at what analysts think. Do they see the Boohoo share price recovery continuing or running out of steam?
Promising early signs
I’ve long been bearish on this stock due to what I see as a weak moat amid intense competition from Shein. Also, there have been past supply chain scandals and changes in the C-suite, which did little to inspire my confidence.
Back in November though, after the firm posted an encouraging H1 FY26 report, I concluded that Boohoo deserved a place on investors’ watchlists at 18p. I needed more convincing, but there were early signs of a potentially strong multi-year recovery.
Last week, we got another promising update. In Q1 (ended 31 May), the group returned to growth, with a 0.5% rise in gross merchandise value (GMV).
Admittedly, that’s not enough to get the heart racing, but the company has endured repeated declines in key metrics for several years since the pandemic. And May was particularly strong, with GMV growth of approximately 8%, led by Debenhams and PrettyLittleThing.
On top of this, profitability is improving due to costs being slashed across the business (including reduced headcount and the shuttering of distribution centres). Exceptional costs fell 72% while capital expenditure reduced by 54%.
With the cost out ahead of plan and strong momentum carried into the year, the Board’s confidence has grown and we are reiterating our guidance of double-digit Adjusted EBITDA growth in FY27.
Boohoo.
Management confirmed that the transition to an asset-light model is progressing well, with around 25,000 brands and partners now selling across the group’s sites. Debt is under control and we should see positive cash flows this year.
Looking ahead
So, what do analysts reckon? Well, they’re currently split, with two saying Buy, two rating the stock Sell, and another pair going with Hold.
But putting their 12-month price targets together, we get an average of 32p. Were this to happen — which is far from guranteed, of course — it would turn a £3,000 investment into almost £4,200.
Personally, I need further convincing that growth can be sustainably reignited. But the online Debenhams department store is differentiated from Shein, in my opinion, and the group’s marketplace model reduces exposure to supply chain disruptions/scandals and inventory build-ups.
Competition and cost-of-living pressures remain challenges, but I think the stock is worth keeping on the radar as a recovery play.
Should you invest £5,000 in Boohoo Group Plc right now?
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Ben McPoland has no position in any of the companies mentioned.
