In early trade the Kogan.com Ltd (ASX: KGN) share price has been amongst the best performers with a rise of almost 6% to $4.61.
This gain brings the online retailer's year-to-date return to in excess of 230%.
Why are its shares higher today?
This morning Kogan released its FY 2018 first-quarter update which revealed that the strong performance in FY 2017 has been carried over to the current fiscal year.
According to the release, Kogan surpassed the milestone of 1 million active customers during August, leading to the business outperforming management budgets.
Unaudited revenues grew an impressive 35.9% on the prior corresponding period. Pleasingly, the company saw its gross margin expand to 18.2% from 17.9%, leading to EBITDA growth of 37.7% on the prior corresponding period.
Elsewhere, management reported solid growth for its mobile business and a strong start to trading for its fledgling insurance business.
Should you invest?
Whilst I'm no stranger to investing in shares with high valuations, I'm a little hesitant to invest in Kogan when its shares are changing hands at 126x trailing earnings.
Especially with Amazon likely to launch in Australia in the near future.
While JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN) are almost certainly going to be negatively impacted by an Amazon launch, it is unclear whether Amazon will be a positive or a negative for Kogan.
Because of this, I'm going to be watching on from the safety of the sidelines and focusing elsewhere in the market.
