The good is 1) they have sorted out their inventory mess 2)...

The good is 1) they have sorted out their inventory mess 2) they've cut their costs right back 3) and GM% is back to normal. So Q4 was their first clean quarter in a while

But the business only generated $2.8m EBIT ($2m NPAT) for the quarter. Which is about $10m NPAT for a full year, allowing for a bigger Cyber/BlackFriday/Christmas period

At a mkt cap of $600-650m, it's trading at a 60-65x current/FY24 PE multiple. That makes it one of the most expensive stocks on the ASX300. This valuation could be justified for a very high growth stock. The only problem is KGN sales are in decline, and even if they trough in FY24 and start growing again, not sure where any kind of material sales growth to justify 60x PE is going to come from

Low value/price goods are doing relatively well in the current economic environment, so KGN has no excuse for weak sales. As their own management have recently said, they have lost market share - Kogan.com (ie. excl Mighty Ape) sales are well below pre-COVID levels (6-months to Dec 2019), so far this year sales are declining double digit% on double digit% declines the year before, the number of active customers are going backwards, and First customers have stalled

There's more competition than ever. Temu launched in AU in April 2023 and already has almost double the website visits of KGN - they are massive in the US, and yet to launch broader range of electronics products here in AU like they have in the US. Amazon has more than doubled their business in AU over the past few years (and unlike KGN are still growing today). And then there's Catch, MyDeal, OzSale, and the discount department stores online offering

The rumours of an acquisition ??? (although handy timing for the CEO/CFO's MASSIVE recently vested stock options) I'd love to know which acquirer could get this past their investment committee - I welcome all the back lash in the world if someone makes an offer for KGN, it's just not going to happen anywhere near these share price levels

I do think KGN is a business that can be profitable by running lean like it currently is, and carving out it's share of the pie. I just don't understand how an efficient market would value this company at 60-65x PE (or 55-60x adjusting for the cash balance). As a comparison, Cettire (CTT) is growing sales at 150%+, has a much higher earnings margin than KGN, and is trading on a 45x FY24 PE