Insights

Is the Kogan (ASX:KGN) share price sinking back to reality?

The Kogan.com Ltd (ASX:KGN) share price has now lost 45% of its value since October. What’s going on here with Kogan shares?
The post Is the Kogan (ASX:KGN) share price sinking back to reality? appeared first on The Motley Fool Australia. –

Two men react in shock at Evolution share price drop record profit

The Kogan.com Ltd (ASX: KGN) share price is not having a fantastic time of late. At the time of writing, Kogan shares have shed 3.4% to $13.79 a share. Not that there has been any major news out of the e-commerce company.

Well, apart from an ASX posting that informed the markets that Kogan’s new director, James Spencely, has an interest in his new company of approximately zero shares. Yep, zip and nada. That’s not exactly inspiring, but also probably not the likely reason why investors are selling out of Kogan today.

In fact, today’s move in the Kogan share price is actually a continuation of a trend that has been playing out for some time. Kogan lost a hefty 22% over the month of February alone. It’s also down almost 30% year to date in 2021 so far. And since it last reached its reigning all-time high share price of $25.57 back in October last year, the Kogan share price has lost 45% of its value. Ouch.

But, as Einstein taught us, everything is relative. Kogan is still way in front if you go back 12 months (up 211%). And if you backtrack 5 years, investors are still enjoying gains of around 805%. Not including dividends.

Still, Kogan has indisputably had a few months to forget. So why the pessimism from investors of late?

Kogan share price comes off the boil

Well, to answer that, let’s take a look at why Kogan shares rocketed last year to begin with. Kogan was one of the rare absolute winners of the coronavirus pandemic. With retail stores in lockdown last year, Kogan’s online store (which sells almost everything) suddenly became hot property. In its quarterly update for the 3 months ending 30 June last year, Kogan reported a gross sales increase of 95% and profit growth of 115%. That update in July helped push Kogan up another 20% when it hit its all-time high in October.

But here’s the thing. Investors can often get a bit carried away, especially with growth stock like Kogan. When presented with numbers like that, it can be easy to forget that it’s possible that those numbers were more of a pandemic-induced one-off than a ‘new normal’ for the company.

Kogan recently delivered its half-year earnings report for the 6 months to 31 December 2020. Even though it presented investors with another unquestionably strong set of numbers, it wasn’t enough to stop the Kogan share price fr0m tanking 9% that day.

Sometimes, investors just push a quality company’s share price too high. That is what might have happened last year. But although investors who bought into the hype back then are licking their wounds today, it’s all relative if you look further out.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Is the Kogan (ASX:KGN) share price sinking back to reality? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!