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Kogan.Com (KGN) has been a phenomenal performer and such an interesting story on our market. Since we’ve had it on as a story we’ve seen the price up almost 200%!

Yesterday’s announcement regarding their quarterly performance for the period ending 30th September 2017 was equally fantastic which highlighted a revenue growth of 35.9% – roughly in line with what the Company provided in their FY17 results.

Alongside, active customers grew significantly and passed the 1M subscriber mark with gross margins going up. With Christmas on the way KGN is “well poised to continue its trajectory” with an increase of $12.8M in inventories as they anticipate huge sales. With their verticals firing on all cylinders, it should translate to a very god 2nd quarter and no doubt the market expects a strong report.

The Company however has flagged that it decided to increase marketing spending which will hit bottom line in the short term but provide benefits in the long term. Cash of $25.8M and a $10M bank facility which is undrawn so far; they are in a fantastic position to handle the upcoming quarter.

Aside from that however, the business itself seems to be doing really great, and it’s no wonder the market has piled into this story sub $2.

Kogan Mobile hit their 2 year anniversary with promotional offers having performed supremely, and recent introduction of another vertical, Kogan Insurance, has had a very “promising start after launching in August”.

We really have to give it to Ruslan Kogan who founded the Company in 2006 and succeeded in turning what was once a two-product garage business, to the largest online department store in Australia. We personally find that with Mr Kogan, he understands the market he operates in extremely well and ensures the services that Kogan.Com offers are as rock solid as possible. Take Kogan Mobile which had gone through a rough patch due to complaints regarding mobile data overcharges, after which with revamping and reconsidering, launched a much stronger mobile service that better catered to the market.

We love the Company and the operator running the gears, and believe (with fingers crossed) that Kogan can continue to deliver year on year. Currently up 155% since their IPO at $1.80, Kogan.Com has definitely been a stellar play on the ASX and we are simply running with our profits.

Currently, KGN is sitting around $4.00, and you’re probably asking whether this is a buy. It’s hard to say at this stage as, technically, there hasn’t been a strong signal. KGN has about 100M shares outstanding so on a market cap of ~$400M you can judge whether a 35.9% in revenue growth for the quarter (1Q17 vs 1Q16) is reasonable.

 

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