Kogan.com - set to drive operational leverage

Annual sales in the Australian Retail Market were estiamted at $266b in CY15, and are expected to grow at a ~5% CAGR from CY15-CY19. The Online Retail Market was valued at $17b and is forecast to grow at an 11.5% CAGR over the same period. Kogan.com is the most visited Australian Pure Play Online Retail website, with a higher Australian traffic ranking than any of its online retail competitors. It offers its more than 2.5m customers access to over 28,000 product SKUs sourced from a large and diverse supplier group. The company is expected to report a gross profit CAGR of ~22% pa over FY16-FY19 with upside stemming from the launch of new product initiatives (Travel, Mobile, Dicksmith.com.au etc.). Given its large and growing active user database, we see opportunity in continuing to offer new verticals (Insurance, Energy etc) while also endeavouring to be the price leader in a fast growing and large addressable online consumer market. We initiate on KGN with a price target of A$2.16ps using a DCF valuation methodology. You can read Canaccord's initiation report here: (VIEW LINK)


MORE ON



2 topics

1 stock mentioned

Canaccord Genuity Group is a leading independent, full-service financial services firm. Canaccord Genuity has been driven by an unwavering commitment to building lasting client relationships. We achieve this by generating value for our individual,...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.