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Kogan.com Ltd Slips Over 20%

Tim Montague-Jones

Tim Montague-Jones has over 20 year investment management experience working in the financial markets. Previous experience includes a ten year stint at Morningstar as a Senior Equity Analyst/Portfolio Manager, founding the Morningstar Growth Portfolio and a founding member of their Investment Committee. Tim was also a Senior Equity Analyst for Macquarie Group and a member of the winning team to obtain the 2016 LONSEC Fund Manager of the Year award.

Kogan.com Limited (ASX: KGN) has opened down over 22% this trading session, after releasing a business update highlighting that Christmas, Black Friday and Boxing Day sales were the highest ever. However, the market appears to have focused on the top line growth of Kogan’s exclusive brands, which showed an unexplained 17% (a big drop when compared to the 35% achieved last quarter). Kogan’s exclusive brands account for 50% of the company’s revenue mix. Furthermore, Kogan’s gross profit has declined from 28% to 9%, due to heavy discounting over the Christmas shopping period.

Kogan.com Ltd

Kogan.com Ltd (ASX: KGN) has slipped over 20% since opening this trading session after releasing a business update, which showed top line growth of 17% for exclusive brand products (compared to 35% from the previous period). Source: Yahoo.


The slowdown in top line growth rate hardly justifies a 20%+ plummet in share price, especially when considering the stock is now trading at 24x for 41% earnings growth in a tough Australian retail environment. As such it appears the market has overreacted to the news.

Kogan.com is an Australian portfolio of retail and services business including Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Health and Kogan Travel. Kogan was founded in 2006 and in 2016 acquired Dick Smith Holdings’ online business and floated on the ASX. The company highlighted a 10% growth in active customers year on year and marketplace growth of 44% in their business update. Additionally, Kogan has continued to deliver on its cost cutting strategy, evidenced by a decline in operating costs, as outlined in the update.

The news comes amidst a resoundingly positive past 12 months, which has seen Kogan investors enjoyed an 89% rally before today’s fall. The stock is now trading for $6.21 per share and is expected to pay a fully franked dividend of 1.8% this year.




This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

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