The Kogan.com Ltd (ASX: KGN) share price has had an amazing ride on the ASX over the past few months. It has risen from $3.92 in mid-March to reach a new all time high of $14.29 in today's trade. This was before pulling back slightly to its current price of $14.01 at the time of writing.
This growth has been driven by a number of positive market updates, with Kogan successfully tapping in to market opportunities offered up during the coronavirus pandemic.
Earlier this month, Kogan successfully completed a $100 million placement. This capital will provide Kogan with the financial flexibility to act quickly on any lucrative future opportunities, in its quest to further expand.
So, with such a strong recent rise in value, does the Kogan share price still offer investors growth potential right now?
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Sales and customers continue to climb
In its latest market update in early June, Kogan revealed that its active customers continue to climb higher. Customer numbers were up by 6.5% during May to a total of 2,074,000. For the fourth quarter to date, i.e., April and May, gross sales for Kogan soared higher by more than 100% compared to the prior corresponding period in 2019.
Kogan's pipeline for new sellers in its Kogan Marketplace also continues to remain very strong. This is adding further fuel to help to increase the company's strong sales momentum and, in turn, drive the Kogan share price even higher.
Due to COVID-19 lockdown restrictions, specialist online retail sites such as Kogan have seen a spike in online sales. In particular, there has been strong demand for home office equipment and accessories such as PCs and laptops. In contrast, many bricks and mortar retailers have suffered from a heavy decline in foot traffic. While some have managed to keep a portion of sales momentum alive through their supplementary online channels, for many the impact on their physical store channels has been significant.
Kogan also revealed in its June update that the company's cash position remains very solid. It had $58.6 million of cash on its books at the end of May.
Is it too late to buy Kogan shares?
With such a massive share price jump over the past few months, the Kogan share price is definitely starting to look rather full. This is reflected in Kogan's price-to-earnings (P/E) ratio which has now climbed to over 70.
While I wouldn't be rushing out to buy Kogan shares at today's price, I still believe the company is a reasonable buy for a long-term investment horizon.
I believe Kogan has created a solid foundation from which to tap into the rising demand for online shopping over the next decade. It has cleverly established a strong foot-hold in the local Australian market, upon which it can build over the coming years. Furthermore, the company's expansion into a broad range of verticals provides sector diversification which can act as a buffer during different times in the investment cycle.
