Fund Manager Summary
The outlook for Kogan.com Ltd presents both challenges and opportunities, as the fund managers believe that the recent quarterly update indicates missed market expectations and stagnated growth in the loyalty program's customer base. In their opinion, the slower second half reflected in the monthly run-rate of the core business has led to a downward revision of analysts' earnings forecasts. However, they note that the lower bar for earnings expectations may facilitate easier achievement for FY24. Consequently, they feel that maintaining their current position weight in the portfolio is appropriate, balancing potential recovery against current market realities.
Source: Trading View
Commentary From The Managers
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Endeavor Asset Management
30 Apr 2024
$5.08
Summary
- Kogan.com Ltd missed market expectations in its latest quarterly update.
- The Company’s loyalty program experienced stagnated growth in its customer base.
- Monthly run-rate of the core business indicates a slower second half.
- Due to these factors, the share price was negatively impacted.
- Analysts have revised earnings forecasts downward.
- Despite challenges, a lower bar for FY24 earnings expectations may be easier to meet.
- Endeavor Asset Management continues to hold its current position weight as it is deemed appropriate for the portfolio.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Endeavor Asset Management
30 Apr 2024
$5.08
- Kogan.com Ltd missed market expectations in its latest quarterly update.
- The Company’s loyalty program experienced stagnated growth in its customer base.
- Monthly run-rate of the core business indicates a slower second half.
- Due to these factors, the share price was negatively impacted.
- Analysts have revised earnings forecasts downward.
- Despite challenges, a lower bar for FY24 earnings expectations may be easier to meet.
- Endeavor Asset Management continues to hold its current position weight as it is deemed appropriate for the portfolio.
Summary
Wilson Asset Management
31 Jan 2024
$5.76
- Wilson Asset Management notes Kogan.com’s latest business update indicates continued profit improvements in the first half of FY2024.
- The company reported a gross profit of $89.5 million, reflecting a 42.1% year-on-year increase, driven by an expanding share of platform-based sales.
- Kogan.com maintains a strong financial position with a substantial cash balance of $83.3 million, despite allocating over $17.2 million to its share buy-back initiative.
- The Kogan.com loyalty program has grown significantly, boasting over 466,000 subscribers as of 31 December 2023, a 15.3% year-on-year increase.
- This growth in the loyalty program contributes to a recurring earnings profile that could lead to a potential share price rerating.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"It appears the winds may be shifting for Kogan.com, as stagnation in its loyalty program and a tepid business outlook could keep investors on edge. With lowered earnings expectations, the path forward seems fraught with cautious optimism."
Last Updated: 30 Apr 2024
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Frequently Asked Questions
Who is investing in Kogan.com Ltd (ASX:KGN)?
Fund managers including Endeavor Asset Management and Wilson Asset Management have invested in Kogan.com Ltd (ASX:KGN).
Why do fund managers invest in Kogan.com Ltd?
Fund managers have invested in Kogan.com Ltd due to its potential for recovery despite recent challenges. Although the company missed market expectations and experienced stagnation in its loyalty program and core business growth, the lowered earnings forecasts may present a more achievable target for FY24. This cautious optimism allows for a strategic investment position while monitoring the company's performance.
What happened to Kogan.com Ltd (ASX:KGN)?
There have been no recent updates from fund managers regarding Kogan.com Ltd although fund managers including Endeavor Asset Management and Wilson Asset Management have previously commented.