The online retailer’s shares soared to $25 in late 2020, but $2 billion of sharemarket value has vanished since those glory days.
was a bellwether for the volatile times in the broader retailing sector over the past three years.
But the mountains of inventory turned into a problem for Kogan.com, as bricks and mortar stores began thriving again from mid-2022, with shoppers returning and foot traffic bustling again.Kogan.com had to discount hard to shift the excess inventory, which meant margins being sliced and profits sliding.
On January 24, he revealed that inventory levels had dropped to $98.3 million at December 31, compared with $160 million on June 30. But sales were down 32.5 per cent to $471 million for the December half, because of the heavy discounting to clear the excess stock.The share price tumbled to just $2.72 in mid-July last year, when the inventory glut was in front of mind for investors, a fear realised in August when the companyIt is now back to $4.48. Kogan.
Morningstar analyst Johannes Faul argues that Kogan.com is severely undervalued, and he puts the “fair value” rating on the stock at $10.70.He said in the crucial Christmas trading period, the cutbacks in inventory position had a bigger effect on the company than Morningstar anticipated and discounting to clear stock weighed on margins. Faul said the shares trade “at a significant discount to our intrinsic valuation”.
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