The Kogan.com Ltd (ASX: KGN) share price has had an amazing ride on the ASX over the past few months. It has risen from $3.92 in mid-March to reach a new all time high of $14.29 in today’s trade. This was before pulling back slightly to its current price of $14.01 at the time of writing. 

This growth has been driven by a number of positive market updates, with Kogan successfully tapping in to market opportunities offered up during the coronavirus pandemic.

Earlier this month, Kogan successfully completed a $100 million placement. This capital will provide Kogan with the financial flexibility to act quickly on any lucrative future opportunities, in its quest to further expand.

So, with such a strong recent rise in value, does the Kogan share price still offer investors growth potential right now?

Sales and customers continue to climb

In its latest market update in early June, Kogan revealed that its active customers continue to climb higher. Customer numbers were up by 6.5% during May to a total of 2,074,000. For the fourth quarter to date, i.e., April and May, gross sales for Kogan soared higher by more than 100% compared to the prior corresponding period in 2019.

Kogan’s pipeline for new sellers in its Kogan Marketplace also continues to remain very strong. This is adding further fuel to help to increase the company’s strong sales momentum and, in turn, drive the Kogan share price even higher.

Due to COVID-19 lockdown restrictions, specialist online retail sites such as Kogan have seen a spike in online sales. In particular, there has been strong demand for home office equipment and accessories such as PCs and laptops. In contrast, many bricks and mortar retailers have suffered from a heavy decline in foot traffic. While some have managed to keep a portion of sales momentum alive through their supplementary online channels, for many the impact on their physical store channels has been significant.

Kogan also revealed in its June update that the company’s cash position remains very solid. It had $58.6 million of cash on its books at the end of May.

Is it too late to buy at today’s Kogan share price?

With such a massive share price jump over the past few months, the Kogan share price is definitely starting to look rather full. This is reflected in Kogan’s price-to-earnings (P/E) ratio which has now climbed to over 70.

While I wouldn’t be rushing out to buy Kogan shares at today’s price, I still believe the company is a reasonable buy for a long-term investment horizon.

I believe Kogan has created a solid foundation from which to tap into the rising demand for online shopping over the next decade. It has cleverly established a strong foot-hold in the local Australian market, upon which it can build over the coming years. Furthermore, the company’s expansion into a broad range of verticals provides sector diversification which can act as a buffer during different times in the investment cycle.

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Motley Fool contributor Phil Harpur owns shares of Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to end its positive run with a sizeable decline.

At the time of writing the benchmark index is down a disappointing 1.5% to 5,900.8 points.

What is weighing on the market today?

While U.S. futures pointing to declines on Wall Street tonight are certainly not helping matters, today’s share market weakness could also be related to Australia’s rising unemployment levels.  

This morning the Australian Bureau of Statistics (ABS) released its jobs data and revealed another sharp rise in unemployment.

According to the release, Australia lost a further 227,700 jobs in May. This brought the total number of unemployed people to a sizeable 927,000. Which means that the unemployment rate has now risen to 7.1%, compared to 6.4% in April and 5.2% in March.

The head of labour statistics at the ABS, Bjorn Jarvis, commented: “The drop in employment, of close to a quarter of a million people, added to the 600,000 in April, brings the total fall to 835,000 people since March.”

What about monthly hours worked?

The unemployment rate doesn’t necessarily show the full extent of the disruption caused by the pandemic.

The ABS data also shows that monthly hours worked fell a further 0.7% in May. This means they are now down 10.2% since March after April’s data was revised up to a 9.5% decline.

Mr Jarvis explained: “The ABS estimates that a combined group of around 2.3 million people – around 1 in 5 employed people – were affected by either job loss between April and May or had less hours than usual for economic reasons in May.”

One small positive was that the underemployment rate decreased by 0.7 percentage points in May to 13.1%. However, this still remains 4.3 points above the March reading.

This means that the underutilisation rate, which combines the unemployment and underemployment rates, climbed to a new record high of 20.2% in May.

“Women continued to be more adversely affected by the labour market deterioration than men. Younger workers have also been particularly impacted,” said Mr Jarvis.

More reading

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• Is the Macquarie share price a solid buy today?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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