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Kogan.Com Ltd (ASX:KGN) share price up after announcing Kogan Mobile’s expansion to NZ

The Kogan.Com Ltd (ASX: KGN) share price finished the day up 0.33% today, the company announced after the market closed that it would be expanding into New Zealand with its Kogan Mobile brand.

Kogan has signed an agreement with Vodafone New Zealand that will mean Kogan can offer telecommunications services in New Zealand.

The company said that plan details will be released closer to the launch date.

David Shafer, the Executive Director of Kogan, said Kogan is delighted to be working with Vodafone NZ to grow in New Zealand, “In Australia, Kogan Mobile has been delivering on its promise to save Aussies more of their hard-earned money, and hundreds of thousands of customers have already migrated to Kogan Mobile in Australia over the past two years.

“We’re thrilled to be partnering with Vodafone New Zealand, the largest mobile network operator in New Zealand, to bring Kogan Mobile to New Zealand customers.”

Vodafone Consumer Director Matt Williams “Kogan Mobile has been an enormous hit with consumers in Australia, Vodafone New Zealand is excited to be partnering with to deliver more choice to mobile customers in the New Zealand market.”

Kogan Mobile generates a small amount of revenue in Australia, so the New Zealand market would be an even smaller opportunity, but it does make logical sense for the company to expand into this geographical new market.

Foolish takeaway

The Kogan share price has done exceptionally well since its listing. In the past year it has gone from $1.50 to today’s $9.12. However, it’s trading at over 200x FY17’s earnings – it will have to grow the bottom line significantly over the next year or two to justify this valuation. I personally wouldn’t buy Kogan shares at the current price.

I think it would be a wiser investment choice to go for a top growth stock like this one which is trading at a much more reasonable valuation.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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