Kogan.com Ltd (KGN.AU) surged 5.07% intraday on Tuesday, marking one of its strongest trading sessions in recent weeks. The rally followed a positive analyst note from Morningstar, which highlighted the stock's undervaluation and anticipated near-term margin improvements.
Morningstar analysts pointed to reduced discounting in Kogan's New Zealand business and normalized inventory levels as key drivers for margin recovery. They also expect operating leverage and lower marketing costs to lift EBITDA margins to 19% in fiscal 2026, up from 8% in 2025. The firm emphasized the growth potential of Australian online sales, calling the stock "significantly undervalued."
The stock had lost 40.9% in 2025, making the current rebound a notable turnaround. Investors are now pricing in improved profitability and market share gains, as suggested by Morningstar's bullish outlook.