The Kogan.com Ltd (ASX: KGN) share price is edging higher on Tuesday. At the time of writing, the ecommerce company’s shares are up 0.5% to $11.91.
This means the Kogan share price is up over 6% since this time last week. This compares to a 0.9% decline by the S&P/ASX 200 Index (ASX: XJO) over the same period.
Why is the Kogan share price outperforming?
The catalyst for the rise in the Kogan share price appears to have been recent lockdowns across Australia.
Given that Kogan has been struggling with excess inventory after management failed to anticipate a sharp slowdown in online sales once physical stores reopened, investors appear optimistic that the current lockdowns will boost sales and help reduce its inventory levels.
Fellow ecommerce shares Redbubble Ltd (ASX: RBL) and Temple & Webster Group Ltd (ASX: TPW) have also recorded strong gains over the period. The Redbubble share price is up 12% in a week and the Temple & Webster share price is up 7%.
Is it too late to invest?
Although Kogan shares are outperforming, they are still down by a massive 39% since the start of the year.
This means it may not be too late to invest if analysts at Credit Suisse are to be believed. The broker currently has an outperform rating and $17.93 price target on the company’s shares.
Based on the current Kogan share price, this implies potential upside of 50% over the next 12 months.
Credit Suisse believes the issues Kogan is facing will only be temporary and that investors ought to focus on its positive medium term growth prospects. Particularly given how its active customer base continues to grows.
In addition, Cannacord Genuity is positive on Kogan and has a buy rating and $14.00 price target on its shares. While it has been very disappointed with its performance in the second half, it remains positive on the future.