The ASX share Kogan.com Ltd (ASX: KGN) has been through a really rough period. In the last five years, the Kogan share price has dropped an astonishing 86%, as the chart below shows.
The e-commerce business benefited from huge online demand in 2020 as well as strong overall retail spending. But the reopening of the economy, excess inventory, and a weak period of retail spending amid high inflation have led to a major decline in investor excitement.
Plus, there is strong competition from other discount retailers such as Kmart and Temu.
The ASX share has fallen so much that it has been removed from the S&P/ASX 300 Index (ASX: XKO). A $10,000 investment five years ago would not have done well, to put it mildly.
Now that there's less attention on the business, is this the right time to invest?
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Good business progress
The FY25 result showed a number of positives, including growth of its top line.
Gross sales increased by 15.1% year over year to $930.9 million, while revenue increased by 6.2% year over year to $488.1 million.
The gross profit margin improved by 2.3 basis points (2.30%) to 38.9%, enabling the gross profit to increase by 12.7% to $189.9 million.
Excluding its goodwill impairment of Mighty Ape, the business remains profitable. In FY25, it generated $35.8 million of adjusted EBITDA, $24.1 million of adjusted EBIT, and $14.9 million of adjusted net profit.
The ASX share also reported that its group active customers increased to more than 3.5 million, group platform-based revenue jumped 24.4% to $111.9 million, and Kogan FIRST (its membership) revenue increased 17.5% to $51.3 million.
The platform-based revenue growth is particularly pleasing because it comes with operating leverage and it's capital-light.
Promising outlook for the ASX share
The company reported that its group adjusted EBITDA margin was 7.5% in FY25. It wants to reach an adjusted EBITDA margin of between 8% to 12% in the medium term and more than 20% in the long term.
While those goals aren't guaranteed to be reached, I think just a progression of the EBITDA margin would excite the market in the longer term, in my view.
The ASX share revealed good growth in its trading update for July 2025. Gross sales increased 26.5% year over year to $80.7 million, while revenue increased 2.6% year over year to $41.3 million.
The business also paid an annual dividend per share of 14 cents in FY25, which translates into a dividend yield of 4.4%, excluding franking credits.
Using the forecasts on Commsec, the Kogan share price is valued at 16x FY26's estimated earnings and 12x FY27's estimated earnings. While it may be unloved, I think this ASX share could be a dark horse to produce good returns over the next two to three years.
