Analysts Have Lowered Expectations For Kogan.com Ltd (ASX:KGN) After Its Latest Results

As you might know, Kogan.com Ltd (ASX:KGN) last week released its latest half-year, and things did not turn out so great for shareholders. It was a pretty negative result overall, with revenues of AU$276m missing analyst predictions by 9.6%. Worse, the business reported a statutory loss of AU$0.22 per share, much larger than the analysts had forecast prior to the result. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Kogan.com

Taking into account the latest results, the current consensus, from the six analysts covering Kogan.com, is for revenues of AU$545.8m in 2023, which would reflect a measurable 5.0% reduction in Kogan.com's sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 28% to AU$0.32. Yet prior to the latest earnings, the analysts had been forecasting revenues of AU$599.1m and losses of AU$0.24 per share in 2023. So it's pretty clear the analysts have mixed opinions on Kogan.com after this update; revenues were downgraded and per-share losses expected to increase.

There was no major change to the consensus price target of AU$4.58, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Kogan.com, with the most bullish analyst valuing it at AU$10.70 and the most bearish at AU$3.07 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 9.8% by the end of 2023. This indicates a significant reduction from annual growth of 15% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 16% annually for the foreseeable future. It's pretty clear that Kogan.com's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Kogan.com. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Kogan.com going out to 2025, and you can see them free on our platform here.

We also provide an overview of the Kogan.com Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.