** Morningstar expects reduced discounting in New Zealand to boost near-term profit margins for Australia's Kogan.com KGN.AX

** Losses in the online retailer's New Zealand business should moderate in FY26 after prior inventory-clearing discounts, since stock levels were normalized before Christmas, Morningstar analysts say

** Despite robust Australian sales in the first four months of FY26—driven by marketing spend, competitor exits, and rising online preference—EBITDA was flat, analysts note

** However, Morningstar expects operating leverage and less marketing as a percentage of sales to materially lift EBITDA margins to 19%, from 8% in fiscal 2025

** Say faster growth in Australian online sales, compared with in-store sales, provides a significant tailwind to KGN

** "Shares are significantly undervalued. We think the market assumes higher marketing costs persist, but without material market share gains" - Morningstar

** Stock lost 40.9% in 2025

(Reporting by Shruti Agarwal in Bengaluru)

((Shruti.Agarwal@thomsonreuters.com))