Kogan.com Ltd (ASX: KGN) is holding its AGM today and unveiled more impressive growth to the end of October 2020.
Kogan’s big trading update
For the first four months of FY20, to October 2020, Kogan.com has seen continued fast growth.
Kogan revealed that in the financial year to date, gross sales increased by 99.8%, gross profit went up 131.7% and adjusted EBITDA (EBITDA explained) has grown by 268%.
The e-commerce business said that it has seen a strong performance from its product divisions and Kogan Marketplace.
Kogan is now entering the strongest trading part of the year, which is important for the performance of the entire financial year.
The company also said it has been investing heavily in variable and marketing costs which is aimed to increase the customer base and brand, which it expects will deliver long term benefits for the company.
Time to buy Kogan.com shares?
The Kogan.com share price has dropped almost 20% over the past month. Some investors are worried that the online sales trend will reverse as a COVID-19 vaccine is deployed to the population.
In my opinion, the growth momentum may slow a little in the 2021 calendar year, but the trend towards online products and services was increasing even before COVID-19 came along. Most of the country hasn’t been limited by COVID-19 restrictions in FY21 – physical stores are open – yet Kogan has delivered the growth outlined above.
With Australia’s low interest rate, I think Kogan’s current share price valuation of around $18 still makes sense for a long term buy. A growing dividends helps boost shareholder returns.