Can Ocado and Boohoo continue to justify their rich valuations?
Despite turbulent market conditions, Boohoo and Ocado’s share price continue to reach new heights. Will shifting consumer trends towards online shopping and the two companies’ sound strategies lead to further capital growth for their investors? Or are the exorbitant valuations a disaster waiting to be unravelled?
Online retailers Ocado (LON:OCDO) and Boohoo (LON:BOO) have capitalised on favourable industry trends to become two of the UK’s largest retailers. Ocado is the world’s largest dedicated online supermarket, with its £15bn market capitalisation being 60% greater than the combined market value of FTSE 100 peers Sainsbury’s and Morrisons, despite it remaining heavily loss making. Boohoo has also grown rapidly as consumers have pivoted from in-store purchases to buying online. It is now the UK’s fourth-largest listed retail business by market capitalisation. Recent trends suggest that the popularity of online shopping could increase. The Covid-19 pandemic may have introduced a segment of…