We exited CAR on valuation grounds, a dangerous pastime in 2024. Even after retreating 10%, it’s trading well above its average multiple of the last five years, closer to 30.9x, making the risk/reward unattractive to MM around current levels.
chart
CAR Group (CAR) valuation over the past 5 years – source Bloomberg
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CAR Group (CAR) valuation over the past 5 years – source Bloomberg
Digital auto marketplace CAR has rallied over 23% in 2024, and the company is on track to deliver excellent growth given how well the international businesses are evolving. This is a great combination with the Australian business, which delivered 12% YoY top line revenue growth in 2H24, making it a stock we would like to own but at the right price.
- We can see CAR falling back towards the $33-35 area if/when we see some valuation contraction across the ASX, i.e. a further +10% pullback.
MM likes CAR under $35
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