Car sales . com
22/07/26
......................
ASX: CAR (CAR Group, formerly Carsales) has delivered solid 5-year revenue growth but has seen volatile net profits and fluctuating Returns on Equity (ROE) due to heavy international acquisitions. The company carries a substantial debt load but remains highly profitable with excellent cash conversion. [1, 2, 3, 4, 5]
Financial Highlights over the last 5 years
| Metric [1, 2, 3, 4, 5, 6, 7, 8, 10] | Recent Data (FY2025 / TTM) | 5-Year Trend & Context |
|---|---|---|
| Revenue | A$1.23 billion | Strong upward trend. Revenue has grown by roughly 20% to 30% over the last 3 years, driven by domestic dominance and US/LatAm expansions. |
| Net Profit | A$295 million | Volatile. Accounting profits fluctuated significantly (peaking in 2023 with non-operating gains before normalizing), but underlying operating profits continue to climb. |
| Debt | ~A$1.41 billion | The debt/equity ratio sits at roughly 0.51. Debt increased significantly over the 5-year period due to funding international acquisitions. |
| ROE (Return on Equity) | ~10.0% | Highly volatile over the last 5 years (peaked at 31.6% in 2023, dropped to 8.4% in 2024, and averaged ~16% mid-cycle). The recent dilution is normal during intensive international scaling phases. |
| Operating Margin | ~53% - 55% | Consistently exceptional. Their asset-light digital marketplace commands operating margins well above sector medians. |
...............................
Tracked Market Performance
Over the last 5 years, the stock has experienced significant growth combined with recent valuation volatility. Trading near A$25.50, the company trades at a Price-to-Earnings (P/E) multiple of approximately 33 and offers a dividend yield of roughly 3.3%. [1, 2]
Over the last 10 years, the P/E ratio for CAR Group Limited (formerly Carsales, ASX: CAR) has averaged roughly 32x. Historically, its valuation has fluctuated between a low of about 13x (during the 2023 financial period) and a peak of over 53x (in 2024–2025). [1, 2, 3]
A breakdown of CAR's P/E multiple fluctuations reveals these key trends over the past decade:
- Long-Term Average: ~ 31.98 x
- Low Point: ~ 13.1x (Recorded in 2023, reflecting a period of compressed earnings or sharp share price drops).
- High Point: ~ 53.8x (Recorded over 2024 and 2025 as the company expanded globally and investor sentiment grew).
- Current Levels: Currently, the trailing P/E sits near 33x, and its Forward P/E is trading closer to 22x, indicating that analysts expect higher future earnings to normalize the premium multiple
Is it under threat from AI and Facebook marketplace?
Dividends are great up to now and rising every year. Only partly franked.
..............
ROIC Vs WACC
Over the last 10 years, CAR Group (ASX:CAR) has experienced a narrowing spread where its Return on Invested Capital (ROIC) has historically trended well above its cost of capital, but recently compressed to roughly match or sit slightly below its rising Weighted Average Cost of Capital (WACC). [1, 2]
Capital Returns and Cost Trends
- ROIC Trend: Historically achieved high double-digit returns on capital employed (such as over 80% a decade ago), but recent figures show ROIC has moderated to an estimated 7.81% to 8.80% due to an expanded capital base and large international acquisitions. [1, 2, 3, 4]
- WACC Trend: The 10-year median WACC for CAR Group sat around 8.92%, but broader market conditions and higher interest rates have pushed current WACC estimates up to 12.27%. [1, 2]
- Value Creation Spread: For most of the past decade, CAR’s ROIC comfortably exceeded its WACC, indicating strong economic value creation. Recently, the higher cost of capital means ROIC (~8%) tracks closer to or slightly below the elevated WACC (~12%), reflecting a transitional phase of capital efficiency as the digital classifieds giant digests global expansion. [1, 2, 3, 4, 5]
................
Debt to Equity
CAR Group Limited (ASX:CAR) has a current debt-to-equity ratio of approximately 0.51 to 0.55. Over the past 10 years, CAR Group's debt-to-equity ratio has experienced a historical range from a low of 0.11 up to a high of 2.04, with a 10-year median value of 0.73. [1, 2]
10-Year Debt-to-Equity Summary
- Current Ratio: ~0.51 – 0.55
- 10-Year Median: 0.73
- 10-Year High: 2.04
Recent Yearly Estimates
- FY 2025 / Mid 2025: 0.46
- FY 2024: 0.46
.....................
No comments:
Post a Comment