Why the Kogan (ASX:KGN) share price is soaring 10% this week

Is the historical lockdown winner being boosted from current COVID-19 outbreaks?

| More on:
Cheering woman shopping online with credit card

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

Shares in Kogan.com Ltd (ASX: KGN) are soaring this week despite no news being released by the online retailer.

The Kogan share price is currently trading at $11.41 apiece. That's almost 10% higher than it was at last Friday's close.

Historically, Kogan has been a COVID-19 winner. With lockdowns currently ongoing in Australia's 3 most populated states, could the market be expecting Kogan's profits to spike once more?

Let's take a closer look at what might be driving Kogan on the ASX.

COVID-19 winner?

The Kogan share price is rallying this week, and while it's not gaining with the same intensity it did in March 2020, this latest lift may be happening for the same reasons.

Kogan shares started 2020 trading at $7.47. They slumped in the March COVID-19 market meltdown but, by the end of the 2020 financial year, had bounced up to $13.91. The upward trajectory didn't stop there either, with the Kogan share price hitting a 52-week high of $25.57 in October.

Back then, Kogan's gains were spurred by a series of record sales. There's no news of the same right now.

However, Victoria last night joined Sydney and Southeast Queensland in locking down against the Delta variant.

Past lockdowns have spurred a switch in consumer retail habits from traditional brick-and-mortar to online shopping. As Kogan is the self-proclaimed largest online retailer in the country, investors might be rallying in case these lockdowns extend beyond their estimated endpoints.

Additionally, the company recently reported that it had solved inventory issues plaguing the Kogan share price.

That might also help to remove the brake on Kogan's shares.

Kogan share price snapshot

Even with this week's uptick, the Kogan share price is well below its golden days.

It has slipped 41% since the start of 2021 and is 39% lower than it was this time last year.

The company has a market capitalisation of around $1.1 billion, with approximately 106 million shares outstanding.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and 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 Retail Shares

Woman smiles at camera at she buys greens from the supermarket.
Retail Shares

Could the Woolworths share price smash the market in 2025?

Let's see if things will be better for this supermarket giant's shares next year.

Read more »

Photo of two women shopping.
Retail Shares

Overinvested in Woolworths shares? Here are two alternative ASX retail stocks

Woolworths shares have disappointed this year. I think there could be better retail stocks to buy right now.

Read more »

High fashion look. glamor closeup portrait of beautiful sexy stylish Caucasian young woman model with bright makeup, with red lips, with perfect clean skin.
Retail Shares

Why now could be a great time to buy this high-performing ASX retail stock

This ASX share could be a sparkling opportunity.

Read more »

Young couple at the counter of a hardware store.
Retail Shares

3 encouraging signs for Wesfarmers shares heading into 2025

There are reasons to be positive about Wesfarmers.

Read more »

A young woman wearing a silver bracelet raises her sunglasses in amazement, indicating positive share price movement in jewellery shares.
Retail Shares

This ASX 200 stock is down 22% from its highs, and the CEO is stocking up

Is this a shiny buying opportunity?

Read more »

A warehouse worker is standing next to a shelf and using a digital tablet.
Retail Shares

Is the Wesfarmers share price facing 'significant downside risk'?

2025 could prove trickier for Wesfarmers shares, this leading expert forecasts.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

Invested $5,000 in Wesfarmers shares in 2021? Guess how much passive income you've earned

Passive income offers a big boost to the performance of Wesfarmers shares.

Read more »

Woman checking out new iPads.
Retail Shares

Better ASX retail buy: Harvey Norman or JB Hi-Fi shares?

ASX retail showdown.

Read more »