The Kogan (ASX:KGN) share price just hit another 52-week low, its fourth this week. Can it fall any further?

The e-commerce company is having a shocking week on the ASX. We see what the experts think about its outlook

| More on:
Group of entrepreneurs feeling frustrated during a meeting in the office. Focus is on man with headache.

Image source: Getty Images

Shares in e-commerce company Ltd (ASX: KGN) haven’t found support today and are trading down 5.3% at $8.04. The result marks the fourth 52-week low for the Kogan share price this week after it closed down at $8.49 yesterday.

Investors applied more selling pressure yesterday after Kogan’s trading update and a remuneration strike from its annual general meeting (AGM).

Nonetheless, it’s been a sea of red for Kogan shareholders this year. Shares are down 83% from a high of $21.67 in January and have given away another 30% in just over a month.

Let’s hear what the experts have to say about the outlook for Kogan investors.

Can fall any lower?

Following Kogan’s trading update, the team at UBS see challenges ahead for the company but retained its neutral rating and $10 price target in a note today.

UBS notes that Kogan’s reinvestment strategy may increase its operating expenditure. It also reckons this trend is likely to increase with respect to Kogan’s growth model.

One point the broker highlights is that Kogan’s operating expenditure was $15 million for October, up 9% on the entire first quarter of FY22.

This occurred even as Kogan made a substantial reduction to its warehousing costs and lower inventory levels – moves typically made to lower operating expenses.

The broker notes that Kogan could keep investing capital to support its sales growth plus better premiums on its customer memberships.

The majority of analysts identified for this report have a neutral or sell rating on the Kogan share price, whereas just 3 are bullish. However, with the share trading at $8 and change, all of these brokers value Kogan at a higher price than the market.

For instance, the consensus price target is $11.15 from the analyst group, implying an upside potential of around 38%.

Credit Suisse is the most bullish, valuing Kogan at $13.88 a share back in October, whereas Jarden reckons it’s a sell at $8.86.

This dichotomy is an interesting one but could make sense given that 50% of the recommendations are neutral on the Kogan share price.

There could also be further updates from each of these brokers in the coming weeks following Kogan’s trading update yesterday.

Kogan share price snapshot

In the past 12 months, the Kogan share price has fallen by more than 50%. It has also crashed 57% this year to date. In the past week, shares are down by more than 11%.

Kogan is also lagging behind its peers and the benchmark S&P/ASX 200 index (ASX: XJO)’s return of around 10.5% in the last year.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

The author Zach Bristow has no positions in any of the shares mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended ltd. The Motley Fool Australia owns shares of and has recommended ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers