市场见解

Is there hope for the Kogan (ASX:KGN) share price in the lead up to Christmas?

Down again today, could Kogan shares go though a Christmas recovery?
The post Is there hope for the Kogan (ASX:KGN) share price in the lead up to Christmas? appeared first on The Motley Fool Australia. –

The Kogan.com Ltd (ASX: KGN) share price has dropped again today. It fell by close to 4% today.

But with Christmas coming up, could there be a recovery over the course of December?

2021 has not been kind to Kogan shareholders. In the past month Kogan has fallen 18%. Over the course of the while 2021 it has fallen 60%.

Whilst past performance is not a reliable indicator of future performance, the last few Decembers have been positive. In December 2020, the Kogan share price went up by a mid-teen percentage. December 2019 was another positive month for Kogan shares. In December 2018, the Kogan share price increased by around 5%. December 2017 saw the Kogan share price jump around 60%.

What is the outlook for the Kogan share price?

No-one can truly know what a share price will do, but analysts and brokers can make profit forecasts, make a judgement about if it’s a buy and guess where the share price might be in 12 months from now (which is called a price target).

Some of the current price targets for Kogan shares are pretty optimistic. UBS has a price target on Kogan of $10 – almost 30% higher than where it is now. Credit Suisse’s price target is $13.88, which is almost 80% higher than today’s price. As a reminder, that’s where the analysts see the business going in a year from now.

UBS is cautious on the business as it’s not sure that Kogan can reach its $3 billion sales target and is also paying attention to the fact that Kogan is spending more on advertising which could hurt profitability.

However, whilst Credit Suisse noted weaker profitability at the earnings before interest, tax, depreciation and amortisation (EBITDA) level, the broker is seeing good levels of top line growth from Kogan.

Most recent trading update

Investors often pay close attention to the latest trading performance of a business, which can influence their thoughts on the Kogan share price.

In the first four months of FY22, Kogan’s total sales had risen by 19% against the same period in FY21. However, gross profit declined a little.

But the FY22 first quarter update showed a recovery compared to the three months to 30 June 2021 – the last quarter of FY21. Quarter on quarter, gross sales were up 23.2% to $330.5 million and gross profit was up 31.6% to $52.5 million.

Talking about the adjusted EBITDA of $9.5 million generated in the first four months, Kogan said that operating costs had been a key focus for the business, namely warehousing and marketing costs.

It has “right-sized” inventory levels since FY21 which has brought warehousing costs down. The business has also continued to “strategically invest” in marketing to expand the Kogan First paid membership base. Management are confident this will have long-term benefits for the company.

Kogan share price valuation

Looking at the estimates for FY23, UBS puts the Kogan share price at 27x estimated earnings and Credit Suisse’s projection puts it at 19x FY23’s estimated earnings.

The post Is there hope for the Kogan (ASX:KGN) share price in the lead up to Christmas? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Kogan right now?

Before you consider Kogan, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Kogan wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

2 top ASX shares for December

The Kogan (ASX:KGN) share price has suffered 4 52-week lows in the past week. Here’s why

Here’s why these 3 All Ordinaries shares just hit 52-week lows

Why Domino’s, Healius, Kogan, and Vulcan shares are pushing higher

These are the 10 most shorted ASX shares

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and 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.

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