CAR Group (CAR) has followed the path we forecast in late September here, after testing the $21 level. The stock bounced +2% yesterday but it remains down a painful 27% YTD, with another test of $20-21 feeling likely if the ASX does endure another leg on the downside. Importantly, the weakness has been driven more by multiple compression than collapsing earnings, operationally, FY26 adjusted profit rose 8% to $407m and FY27 revenue growth of 11–14% is expected, but rising bond yields, earnings downgrades and concerns around AI potentially disrupting online marketplaces have weighed heavily on its previously premium valuation.
NB We’re not considering increasing our exposure to the ASX Tech sector, however CAR could be an alternative to our current exposures Xero and WiseTech which have underperformed.
- We can see CAR testing $28-30 area in the coming months, a 30% bounce from current depressed levels.
MM is bullish towards CAR around $22
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