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The boohoo share price just fell another 10%. Is it an unmissable buy now?

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The boohoo (LSE: BOO) share price slumped 10% in early trading Wednesday after the release of first-half results.

And after a dip at the end of Tuesday, the shares are down 17% over two days.

From being a high-flying growth stock just a few short years ago, boohoo has fallen firmly out of fashion with investors. But there’s surely a price at which it can’t fall any further and it’s a no-brainer buy, isn’t there?

The latest update is headed “Leading the fashion eCommerce market.” My investment in boohoo shares might have fallen more than 85% in the past 12 months. But at least it’s the leader.

When a results release opens with the actual figures, not preceded by any waffling marketspeak, I know not to expect good news.

Profit crunch

Revenue figures do actually look decent, with a modest fall of 10% compared to the first six months of the previous year. Considering the way online sales were boosted by the pandemic, I’m happy enough with that.

And compared to the same period in 2019, before Covid arrived, revenue has soared by 56%. So why did the share price fall?

You know the old “revenue is vanity, profit is sanity” saying? Well, adjusted EBITDA crunched down by 42% compared to 2019. So while revenue more than doubled, profit at that level almost halved.

And it gets worse. Bottom line adjusted diluted earnings per share fell 90% compared to the first half in 2019. And the company has gone from having net cash of £207m on the books, to net debt of £10.4m.

Not a loss, but…

I suppose the one small comfort is that boohoo didn’t actually report a loss. But its adjusted profit before tax of a measly £6.2m is still pretty shocking for a company that was historically taking its market by storm.

What about the outlook? The board expects first-half conditions to continue through the second half, and I doubt anyone would argue with that. Guidance for EBITDA margins is down to between 3% and 5%. Previously, boohoo had hoped for the 4% to 7% range.

The rest of the release is all about plans to revitalise the business. Chief executive John Lyttle spoke of getting the firm “in good stead as macro-economic headwinds ease.” He reckons boohoo is confident in the long-term outlook. But he has to say that, really. It’s part of the job.

What to do?

So what should a poor boohoo shareholder like me do now? Well, I could sell my shares and buy, maybe, some soup and a sandwich. Or, perhaps I could sell a few tins of soup and double up my investment.

Seriously, first thing is to hold my hands up and admit how painfully wrong I got this one. I didn’t come close to predicting how badly things would turn out this year.

And right now, boohoo could well be a good stock market recovery buy. All joking aside, it genuinely is a pioneer of its business. And it has the experience and infrastructure to hopefully lead the market once again. Just not this year.

The post The boohoo share price just fell another 10%. Is it an unmissable buy now? appeared first on The Motley Fool UK.

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Alan Oscroft has positions in boohoo group. The Motley Fool UK has recommended boohoo group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.