Kogan.com Expands Share Buy-Back Amid Weak Valuation

About Kogan Limited

Kogan Ltd (ASX: KGN) is one of Australia’s leading online retailers, offering a broad range of consumer goods including electronics, appliances, homewares, and financial services. Known for its private-label products and direct-to-consumer model, Kogan focuses on price leadership, supply chain efficiency, and digital-first customer experiences. The company operates a portfolio of brands and partnerships across Kogan.com, Dick Smith, and other platforms, serving both metro and regional customers nationwide.

Buy-Back Strategy Amid Weak Valuation

Kogan.com’s continuation of its on-market buy-back program signals an effort to support shareholder value amid prolonged share price underperformance. On 1 April, the company announced that it had acquired 21,535 shares during trading on 31 March, with the purchases made at a narrow price band of $4.61 to $4.67. This forms part of its broader buy-back initiative, which authorises the repurchase of up to 10,068,759 ordinary shares. To date, approximately 2.2 million shares have been bought back, leaving over 7.8 million shares available for repurchase through to the program’s expiry on 12 May 2025.

Kogan has faced ongoing market headwinds, with its stock price falling more than 41% over the last 12 months, underperforming both the broader consumer discretionary sector and ASX indices. Despite improved gross margins and disciplined cost control noted in recent earnings updates, sentiment remains cautious amid subdued online retail demand and tighter consumer spending.

Management’s decision to proceed with the buy-back suggests confidence in Kogan’s longer-term strategy and intrinsic valuation. By reducing the number of shares on issue, the company enhances its earnings per share profile and offers potential upside to shareholders who maintain their positions. With a PE ratio of 77.5, the stock trades at elevated earnings multiples, suggesting market participants are still pricing in high growth expectations despite short-term challenges.

The use of Canaccord Genuity as the broker reinforces a structured execution strategy and further buy-backs are expected if the share price remains in undervalued territory relative to internal metrics.

Market Outlook and Shareholder Positioning

Despite its recent performance slump, Kogan.com remains a well-recognised brand in Australia’s online retail landscape. The company’s diversified product offering, logistics infrastructure, and private-label strategy offer competitive advantages that could support future margin expansion — especially once macroeconomic pressures stabilise.

On 31 March 2025, the stock closed at $4.65, trading near the bottom of its 52-week range ($3.98 – $8.08). With daily trading volume at 282,143 shares, investor interest remains present, though sentiment is clearly subdued. Kogan continues to offer a 4.73% dividend yield, which may appeal to income-focused investors seeking defensive yield within the consumer cyclical space.

Kogan’s decision to return capital via buy-backs instead of aggressive reinvestment signals a cautious, shareholder-aligned stance during a period of margin protection and cost recalibration. The company has previously highlighted its focus on streamlining inventory, improving warehouse automation, and reducing third-party dependency — key moves to restore operational leverage.

While the PE ratio of 77.5 appears high, this is not uncommon for companies in transition or operating in cyclical sectors where near-term earnings are compressed. Investors will likely assess the sustainability of Kogan’s cost management strategy and the potential for renewed consumer demand in FY26 before reassessing valuation multiples.

The buy-back, while modest in scale, may serve as a stabilising mechanism — supporting the share price and improving shareholder perception. If macro tailwinds return, the company could be well-positioned to rebound due to leaner operations and a simplified balance sheet. Until then, capital return strategies like buy-backs and dividends will remain core to investor value creation.