Kogan, really cheap given the growth profile, page-36

Thanks for asking Jay.
Just a couple of points :

1/ Since my initial note 2 months ago, the share price increase has been mainly driven by upgrade in their earnings (their monthly EBITDA has increased by 43 % between April/May and July). So there has been some multiple expansion, which remain limited as EV/EBITDA increased from 13.6 x to 16.6 x.

2/ When you look at the EBITDA margin increase from H1 20 to April/May 20 (from 8.3 % to 13.4 %), it was only driven by the gross margin which increased from 22.7 % to 29.7 % and seems to have further increased in June and July. That's a rather unique increase. I am still trying to understand what are the main drivers (probably more explanations when they publish). They mentioned the emergence of their market place during H1 20.

3/ Given the sentiment on the stock, it is also interesting to have in mind the main risks. At this stage, I think that the company has 2 main weaknesses : its average relationship with the regulator and its level of service which can probably be improved. I continue to think that their cost of doing business is probably too low. Investing in a better service would help them get more repeat customers.

In term of valuation, the company has a free cash flow yield of around 5.5 % (based on their last monthly EBITDA annualised).
Let's hope that it will still be the same story after they publish on Monday.