The Kogan.com Ltd (ASX: KGN) share price is on course to finish the week with a strong gain following its annual general meeting.
At the time of writing the e-commerce company's shares are up almost 9% to $4.14.
Why are they higher?
Within its annual general meeting presentation, CEO Ruslan Kogan provided the market with a trading update.
Kogan recently advised of a strong start to FY 2018 and that sales and EBITDA growth were up 35.9% and 37.7%, respectively, over the prior corresponding period.
Since then trading has improved further and, as of the end of October, revenue growth had accelerated to 36.2%. Furthermore, the company has seen its gross margin widen to 18.4%, leading to an acceleration in EBITDA growth.
Although management has decided against providing any full-year guidance, it expects the company to continue its trajectory of strong revenue growth as its continues to invest in its brand, inventory, and marketing. It also expects its EBITDA margin to continue to widen as it diversifies its business.
Should you invest?
I have been thoroughly impressed with Kogan's performance over the last 18 months. However, it will arguably be the next 18 months that makes of breaks the company.
While Kogan believes that Amazon's launch will actually be a positive for it, I'm undecided on this. I struggle to find an example of a Kogan-like company that has thrived in the US or the UK alongside Amazon.
If its shares were trading on a much lower multiple then I might be happy to take on the risk, but at 114x trailing earnings the valuation is a little bit rich for my tastes.
