2 rapidly growing ASX ecommerce shares to buy

Kogan.com Ltd (ASX:KGN) and this ASX ecommerce share are growing rapidly and have been tipped as buys. Here's why…

| More on:
man on his laptop

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With the pandemic accelerating the shift to online shopping by as much as five years, ecommerce companies appear very well-placed for growth in the coming years.

But how should investors gain exposure to this trend? Two ecommerce companies that are rated as buys are listed below:

Kogan.com Ltd (ASX: KGN)

One of Australia's fastest growing ecommerce companies is Kogan. After a stellar performance in FY 2020, Kogan's strong form has continued in the current financial year. 

During the first four months of FY 2021, Kogan's sales were up 99.8% on the prior corresponding period. Things were even better for its earnings thanks to margin improvements. The company's operating earnings grew a massive 268.8% over the same period last year.

Since then, the company has bolstered its growth through the value accretive acquisition of fellow ecommerce company Mighty Ape for $122 million. Mighty Ape operates online stores in New Zealand and Australia and has a focus on gaming, toys, and other entertainment categories. It has more than 690,000 unique customers and more than 895,000 subscribers.

For the 12 months ended 30 September, Mighty Ape generated revenue of A$120.1 million, gross profit of A$37.8 million, and EBITDA of A$9.9 million.

One broker that was a fan of the acquisition was Canaccord Genuity. It has a buy rating and $25.00 price target on Kogan's shares. It sees the potential for significant revenue and cost synergies from the deal.

MyDeal.com.au Limited (ASX: MYD)

Another ecommerce company growing quickly is MyDeal.com.au. It is an online retail marketplace provider with a focus on furniture, homewares, appliances, technology, baby products, and hardware.

As with Kogan, MyDeal has been a very strong performer over the last 12 months and this has continued in FY 2021. During the first quarter, the company delivered a 317% increase in gross sales to $56.67 million. This was underpinned by a 268% increase in active customers to 669,897.

RBC Capital Markets is very positive on the company. The broker has a buy rating and $1.60 price target on its shares. It believes MyDeal is at an inflection point as annualised gross transaction value exceeds $200 million and customer numbers close in on 700,000.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Growth Shares

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Growth Shares

3 exciting Australian growth shares to buy with $3,000 in August

Analysts think these shares could be top buys for Aussie growth investors.

Read more »

Young woman waiting for job interview.
Growth Shares

Australian job ad volumes declined last month. Are Seek shares a sell?

Should investors seek returns elsewhere?

Read more »

happy investor, share price rise, increase, up
Growth Shares

The best ASX growth shares to buy now

These growth shares have been recommended as buys.

Read more »

A young well-dressed couple at a luxury resort celebrate successful life choices.
Growth Shares

Where to invest $2,500 in ASX shares in August

Let's see which shares are being tipped as buys for next month.

Read more »

Person pointing at an increasing blue graph which represents a rising share price.
Growth Shares

What to buy now with the ASX at a record high

Analysts think these shares could still rise strongly from current levels.

Read more »

A young man looks at a stylised investment graph superimposed on an exterior office building backdrop.
Growth Shares

Where to invest $10,000 in ASX 200 stocks today

Analysts think these high-quality shares are in the buy zone for investors right now.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Growth Shares

Two ASX industrials shares with buy recommendations

One broker believes these growth shares are set to rise.

Read more »

Man smiling at a laptop because of a rising share price.
Growth Shares

I think these 2 exciting ASX growth shares are buys today

These stocks could deliver big returns.

Read more »