Why is the Kogan share price smashing the ASX 200 on Friday?

Investors are shopping for Kogan shares today.

Key points
  • E-commerce business Kogan is currently beating the ASX 200 
  • The Kogan share price is up more than 2%
  • Management is feeling confident about a turnaround for the online retailer

The Kogan.com Ltd (ASX: KGN) share price is outperforming the S&P/ASX 200 Index (ASX: XJO) today.

At the time of writing, Kogan shares are up 2.6% while the ASX 200 is down by 0.1%.

It's normal for there to be volatility and declines on the ASX share market. However, it is interesting that Kogan shares are beating the index today.

A girl sits on her bed in her room while using laptop and listening to headphones.

Image source: Getty Images

What's going on?

The company hasn't announced any news today. However, there has been a number of interesting things announced by Kogan over the past couple of weeks.

Investors may be digesting the news that a couple of days ago, the chief financial officer, chief operating officer, and executive director David Shafer bought 150,000 shares on-market at an average price of $3.38.

It's interesting when the leadership of a business decides to buy shares. An investment on-market could be a good indication that management believes the Kogan share price is undervalued and that the business has a compelling future, particularly at the current price.

Kogan isn't the only e-commerce ASX share that is also up today. The Redbubble Ltd (ASX: RBL) share price is up 5.5% and the Temple & Webster Group Ltd (ASX: TPW) share price has risen by 0.4%.

Positive outlook for FY23

Investors may also be thinking about the "positive outlook" in FY23 that Kogan outlined in its FY22 result.

In FY23, Kogan is "looking forward" to the continued expansion of Kogan Marketplace, including the anticipated launch of an advertising platform, growth for Mighty Ape, and growth of Kogan First memberships as it heads to one million subscribers.

It also said that it's looking forward to "returning to positive operating leverage". Kogan said it returned to a profit of adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) in the fourth quarter of FY22.

July 2022 saw group adjusted EBITDA of $1.5 million and operating costs reduced by 19.3% year over year after ongoing efficiency improvements.

Kogan share price snapshot

Despite the positivity, Kogan shares are down around 17% over the past month.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Kogan.com ltd, REDBUBBLE FPO, and Temple & Webster Group Ltd. The Motley Fool Australia has positions in and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. 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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