Kogan Share Price Pushes to New All-Time Highs (ASX:KGN)

At time of writing, the share price of Kogan.com Ltd [ASX:KGN] is up 8.77%, trading at $12.40.

The Kogan share price is on a hot streak, bouncing from the March lows and pushing to new all-time highs.

The chart gapped up at the start of the day, with the KGN share price going just shy of $13 at the start, and from bottom to top, this represents a 275% rise:

KGN Share Price Chart - Kogan Australia Shares

Source: tradingview.com

Here’s a quick look at the catalyst for today’s rise.

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Positive trading update spurs Kogan share price

The May trading update had the following news for investors:

  • Active Customers rose to 2,074,000 as at 31 May 2020
  • Gross Sales up by more than 100% across 4QTDFY20
  • Gross Profit up by more than 130% across 4QTDFY20
  • Adjusted EBITDA grew by more than 200% across 4QTDFY20
  • Financial year-to-date Adjusted EBITDA to the end of May 2020 grew by more than 50%
  • Average run-rate of Adjusted EBITDA across 4QTDFY20 was $7 million per month
  • Cash of $58.6 million and a debt facility drawn to $26 million

So, despite the steady rise over the last two months, it’s fair to say these numbers beat expectations.

Sales are up 100%, but profit being up 130% means the company is finding efficiencies too.

Kogan’s success so far is in stark contrast to the fortunes of Myer Holdings Ltd [ASX:MYR].

Myer now has a market cap just one-fifth the size of Kogan’s, at time of writing.

Outlook for Kogan share price

The Myer/Kogan comparison shows you the rapid evolution in shopping habits in the pandemic age.

Kogan doesn’t need to negotiate with landlords, because it is a budding e-commerce behemoth.

Their recent acquisition of Matt Blatt, is further evidence of an expanding footprint in Australia.

Momentum may carry Kogan higher for now, but at some point, you would be right to expect some profit-taking to occur.

For now though, Kogan investors will be enthused by its prospects.

Remembering that Kogan started its life as a small-cap, if you want Ryan Dinse’s top three small-caps for 2020, you can find that here.

Regards,

Lachlann Tierney,
For Money Morning


Lachlann Tierney is a writer for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. Recently he has been working with Ryan Dinse. Lachlann is involved in two publications:


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