CAR share price in focus
Founded in 1997, Carsales.com is an online marketplace that specialises in car, motorbike, and boat advertisements in Australia.
As a marketplace provider, Carsales.com aims to simplify and improve the buying and selling process for both parties. Large online transactions are also safer than cash-based transactions as funds can be held in escrow and only released when both parties are satisfied with the transaction.
The company has grown to now have over 600 employees and serves various countries outside of Australia, many of which are in South America and Southeast Asia.
While it may be large, CAR Group Limited is a growth stock, and so it requires a different set of rules and may not be straightforward to value at times. Studies have shown that over 5-10+ years, it’s top-line revenue growth which explains a stock’s performance. That’s why it’s good to see CAR Group Limited is able to grow revenue at 37.0% per year, a strong clip.
ASX shares
ASX Limited operates Australia’s primary national securities exchange. This includes the provision of securities exchange services, derivatives exchange services, central counterparty clearing services, and registry, settlement, and delivery-versus-payment clearing financial products.
The company provides access to a variety of different products, including shares, futures, exchange traded funds (ETFs), managed funds, and real estate investment trusts (REITs).
ASX operates at the heart of the Australian financial markets. It oversees compliance for listed companies and aims to promote a high standard of corporate governance and a fairer playing field for retail investors.
CAR share price valuation
As a growth company, some of the trends we would be looking for from CAR include revenue growth, profit growth, and return on equity (ROE). Since 2021, CAR has grown revenue at a rate of 37.0% per year to reach $1,099m in FY24. Over the same time period, net profit has increased from $m to $250m. CAR last reported a ROE of 8.6%.
Over the last 3 years, ASX has increased revenue at a rate of 15.8% per year to hit $1,581m in FY24. Meanwhile, net profit has tumbled from $481m to $474m. ASX’s last reported ROE was 12.9%.
Please keep in mind that context is important – these metrics give us some indication of company performance, but we need a lot more info to work out the value of CAR or ASX shares. To learn more about valuation, I’d recommend signing up for one of our free online investing courses.
