CAR +9.92%: delivered a broadly in-line FY26 result, but it was the stronger-than-expected FY27 outlook that caught our attention, sending shares sharply higher. After a difficult year for the classifieds sector amid concerns around slowing growth and potential AI disruption, the guidance went a long way toward addressing both issues.
Key results versus consensus:
- Adjusted NPAT of A$407.2 million, up 8% and modestly ahead of the A$405.4 million expected.
- Revenue from continuing operations of A$1.25 billion, up 5.9% and around 2% below the A$1.27 billion expected.
- Adjusted EBITDA of A$700 million, up 9.2% and broadly in line with the A$702.3 million expected.
- Final dividend of 43.5c per share, up from 41.5c.
The key positive was FY27 guidance. CAR expects 11–14% revenue growth and 10–13% EBITDA growth in constant currency, which was slightly better than the market had been anticipating.
Australia is expected to grow revenue at a high-single-digit rate, while the international businesses should again do much of the heavy lifting. That international diversification is becoming increasingly important. FY26 revenue grew 7% in Australia, but much faster elsewhere, with North America up 12%, Asia up 15% and Latin America up 19%.
There was also an interesting read-through from the changing Australian vehicle market. Used EV and hybrid listings on Carsales increased by roughly a third over the year to almost 24,000 in June, while newer EV manufacturers increased advertising spend materially as they compete for market share. CAR is therefore benefiting not only from transaction volumes, but also from the growing number of brands needing to advertise and establish themselves.
AI disruption has been one of the major reasons CAR and other classifieds stocks have de-rated over the past year. Management remains confident that its brands, dealer relationships, proprietary data and marketplace scale create a meaningful competitive moat, while CAR itself continues to use AI to deepen its role within dealer workflows and improve its products.
MM’s view: The FY26 numbers themselves were fairly uneventful, but the FY27 outlook was the important part. Double-digit revenue and EBITDA growth guidance suggests the business has more momentum than the market thought, particularly internationally, while the strong share-price reaction shows how low expectations had become.
MM is cautiously bullish CAR ~$29
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