As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of KoganCom Limited (ASX:KGN), it is a financially-sound company with a strong track record and a buoyant growth outlook. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Kogan.Com here.

Exceptional growth potential with flawless balance sheet

Bullish market analysts are forecasting fast-growing KGN to deliver an exceptional sales growth rate of 60.65% over the next year. This is expected to flow down into an impressive return on equity of 45.92% over the next couple of years. In the past couple of years, KGN has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 22.27% return to shareholders, which is an optimistic signal for the future.

KGN is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that KGN has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. KGN currently has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.

Next Steps:

For Kogan.Com, I’ve compiled three relevant aspects you should look at:

1. Valuation: What is KGN worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether KGN is currently mispriced by the market.

2. Dividend Income vs Capital Gains: Does KGN return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from KGN as an investment.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of KGN? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.