Some points about consumer demand:Trying to forecast out...

Some points about consumer demand:

Trying to forecast out consumer demand for Kogan products several years into the future is going to be difficult.

Let me say strategically I like Kogan's business model. It's another JB Hifi. It fits with the evolution of long term changing consumer buying habits towards online purchasing, it fits with Australia as a high rental and high cost of labor and so has a sustainable competitive and durable business model.

However its forecast earnings over the next 2-3 years will very much depend on how corona virus continues to impact the globe.

Once international travel fully opens, there will be down spike in demand for consumer products. Right now consumer $ demand for travel is being converted into spending $ locally. An opening of international travel will reverse this.

This factor has to be built into ones expectations of Kogan earnings over the next few years.

A quick look at the financials shows:

2020 EPS: $0.28
2021 Forecast EPS: $0.47
2022 forecast EPS: $0.50
2023 forecast EPS: $0.58

In my opinion the 2023 forecast EPS is at greatest risk of being too high due to the opening up of boarders by then. By 2023 one would expect international travel to start to be well underway (ie the period from July 2022 - June 2023).

Note all the above figures have been extracted prior to todays earnings downgrade. With todays earnings downgrade the above numbers will be brought down.