One of the best performers on the Australian share market on Tuesday is the Kogan.com Ltd (ASX: KGN) share price.
Fresh from a 20% gain on Thursday, the ecommerce company's shares are up a further 9% to $5.84 this afternoon.
Why has the Kogan share price rocketed higher?
Investors have been fighting to get hold of Kogan's shares since the release of its business update last week.
That update revealed that company's active customers had grown 23.4% year on year to 1,589,000 as at March 31. The increase in customer numbers helped lift gross transaction value by 17.5% and revenue by 9.5% during the third quarter.
Another positive was that margin improvement led to its gross profit growing by 28.4% and EBITDA increasing by a whopping 96.4% on the prior corresponding period during the quarter. The latter means that EBITDA is now up 15% year to date after the company recovered from a very disappointing start to the financial year.
In addition to this, Kogan announced that it was taking on Carsales.Com Ltd (ASX: CAR) and iSelect Ltd (ASX: ISU) through the launch of two new verticals.
The first is the launch of Kogan Cars in partnership with Elicpx Group Ltd (ASX: ECX).
Management advised that: "Kogan Cars will secure new cars at competitive prices from dealers across Australia while also enabling customers to trade-in cars from a wide range of makes and models. Kogan will receive fees from Eclipx Group under the arrangement. Further details will be announced closer to the launch of Kogan Cars, which is expected to occur prior to the end of the financial year."
Another new vertical that the company has launched is Kogan Energy Compare, which "reflects its initial entry into the energy market, via the launch of an energy comparison tool enabling customers to simply upload an existing bill to see if any savings are available."
Management advised that it intends to continue to explore a Kogan-branded energy offering in parallel to this service.
Should you invest?
Whilst I was pleased to see Kogan's performance improve again and can't say I'm surprised to see its shares race higher, I'm still not a buyer of its shares at this point. Due to its inconsistent performance, I intend to keep my powder dry for the time being and wait to see how its full year results look in August.
