APE - eagers automotive
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Over the last five years, Eagers Automotive (ASX: APE) has seen steady revenue growth to record highs (BYD & EV vehicles ), though net profit and Return on Equity (ROE) have experienced volatility and compressed from their cyclical peaks. Main competitor is PWR - peter warren holdings and independent mechanics who compete on price. [1, 2]
Financial Highlights (Last 5 Years)
- Profit: Eagers Automotive posted a record revenue of $13.05 billion for the full year 2025 (a 16.5% year-on-year increase). Net profit for FY2025 came in at $226.7 million, rebounding 11% compared to 2024 but remaining below the cyclical highs of over $281 million achieved in FY2023. [1, 2, 3, 4, 5]
- Debt: Total debt increased as the company engaged in strategic expansions, sitting around $3.06 billion in liabilities, with long-term debt reported at $1.18 billion. This looks very high ......However, the debt-to-equity ratio has trended down (from 127.9% to 111.1%) and the company maintains a low, manageable gearing ratio of 0.18x. [1, 2, 3, 4, 5]
- ROE (Return on Equity): Reflecting the broader normalization of the automotive market and higher expenses, APE's ROE has compressed from a multi-year peak of 27.2% in 2022 to approximately 14.3%. [1, 2, 3]
You can track real-time APE statistics or view the detailed financials overview to monitor how they balance their debt and capital management in the future.
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The historical 10-year mean P/E ratio for Eagers Automotive Limited (ASX: APE) is 12.79x, with a median of 13.95x [1.31]. The company's valuation has experienced significant cyclical volatility over the decade, heavily influenced by dealership mergers (such as the AHG acquisition in 2019), the COVID-19 supply chain disruptions, and the post-pandemic automotive retail boom. [1]
Annual P/E Ratio History (2016–2026)
| Year | Approximate P/E Ratio (FY Ending Dec) | Context & Valuation Drivers |
|---|---|---|
| 2026 (TTM) | 24.21x | Trading elevated relative to historical averages. |
| 2025 | 26.9x – 30.7x | Valuation expanded sharply following a correction in earnings momentum. |
| 2024 | 12.3x – 13.2x | Compressed as vehicle supply normalized and margins faced pressure. |
| 2023 | 13.4x | Stable pricing aligned close to the company's historical median. |
| 2022 | 14.9x | Normalizing down from pandemic highs as broader market multiples cooled. |
| 2021 | 13.2x | Exceptionally high earnings (strong margins from vehicle shortages) kept the net P/E low despite stock price gains. |
| 2020 | 52.11x (Peak) | Spiked heavily in mid-2020 due to severely depressed lockdown-era earnings. |
| 2019 | -3.04x (Trough) | Bottomed out in negative territory following statutory losses and massive restructuring costs from the AHG acquisition. |
| 2018 | 10.8x | Subdued valuation reflecting a cooling Australian residential property market and lower consumer discretionary spend. |
| 2017 | 13.9x | Aligned directly with the long-term historical average. |
| 2016 | 15.5x | Steady, mature automotive retail cycle trading at standard retail market multiples. |
Extreme Valuation Milestones
Key Analytical Takeaways
- Cyclical Nature: As a specialty auto retailer, Eagers Automotive's earnings fluctuate with vehicle availability, interest rates, and consumer discretionary income, swinging the multiple across cycles. [1, 2]
- Premium Rating: The current P/E ratio sits notably higher than the Australian Specialty Retail industry average (~15.6x), meaning the market has priced in a strong premium or expects a rebound via initiatives like their current share buyback. [1, 2]
- The longterm share price sits between $10 and $15... with a yield above 4%
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ROIC VS WACC
Eagers Automotive (ASX:APE) maintains a relatively balanced economic spread, with a current trailing return on invested capital (ROIC) of roughly 7.88% to 8.61% narrowly tracking or exceeding its weighted average cost of capital (WACC) of approximately 7.2% to 7.93%. Over the past 10-year cycle, Eagers Automotive Ltd has generally hovered around a 10-year median WACC of 8.41%, with post-2020 operational scale expansion pushing ROIC into positive value-creation territory during peak automotive industry years. [1, 2, 3]
Capital Returns vs. Cost of Capital
- Current ROIC: ~7.88%–8.61% (driven by strong post-pandemic dealership revenue and property holdings).
- Current WACC: ~7.2%–7.93% (comprising a cost of equity near 7.95% and cost of debt near 5.5%–6.59%).
Historical Context and Value Creation
- Value Spread: For most of the past decade, APE's operational efficiency and major acquisitions (such as Automotive Holdings Group) allowed its ROIC to fluctuate close to or moderately above its cost of capital during high-margin periods.
- Capital Structure: Debt accounts for roughly 16%–40% of financing components depending on floor-plan adjustments and property lease accounting under AASB 16, stabilizing its overall blended cost of capital near the high-7% range historically.
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