 Auto Trader raises full year profit guidance
"The internet has transformed the way we buy used cars. The days of having to trudge around forecourts, trying your best to avoid the sales man are becoming a thing of the past. Nowadays, most consumers buy a car from the first forecourt they visit, having already made their buying decision online.
Auto Trader owns the leading online auto marketplace in the UK and Ireland. The majority of revenues come from car retailers who pay to advertise cars on its site, in a similar way that estate agents pay to list their properties on sites like Rightmove.
The group benefits from a dominant market position, reinforced by a long established brand name (the print magazine was founded in 1977, with the business becoming 100% digital in 2013). The site attracts 43 million monthly cross platform visits, five times more than its nearest competitor. Over 80% of all time spent on automotive classified sites is spent on Auto Trader."
hxxp://www.hl.co.uk/shares/share-research/201602/auto-trader-raises-full-year-profit-guidance |
JP Morgan upgrades to OVERWEIGHT. Increases target price to 420p from 335p. |
Trevor Mather, chief executive of Auto Trader Group plc, said: “Auto Trader has delivered a strong first half performance, as retailers, consumers and manufacturers alike are increasingly recognising the value of our marketplace.
“We continue to grow our audience of car buyers and develop products to add value to our retailers, helping them remain competitive and make informed decisions based on real-time market data, allowing them to buy and sell the right stock at the right price.
“We believe there is substantial opportunity to grow the business based on the increasing importance of the internet for automotive advertising, and the growing use of data to improve the efficiency and effectiveness of the industry.”
Read more: hxxp://www.yorkshirepost.co.uk/news/autotrader-performs-well-over-past-four-months-1-7735704#ixzz40W5oklkX |
To justify the valuation they need to keep outperforming, the premium being paid is massive for fairly underwhelming growth.
Based on fundamentals and a reasonable price for growth I don't see how these are worth much more than £2 a share. |
I had been considering a purchase on the pullback but as pointed out above there is likely to be a lot more stock come to market in the very near future so I think I will just sit on my hands for the minute. |
You missed this bit:
"The Board notes that lock up agreements entered into at the time of the Initial Public Offering (IPO) in March 2015 will come to an end on 18 March 2016."
Sell the spike. Looks like the selling shareholders in the IPO are about to place a load more shares into the market.
£3? £3.20? |
Superb update:
The Group has performed well during the last four months. The increase in Average Revenue per Retailer Forecourt (ARPR) has been stronger than anticipated, as has consumer services revenue. The number of retailer forecourts advertising on our marketplace remains broadly flat. Costs have been well managed and this combination has led to further margin increases. Furthermore, profits continue to be converted into cash at a high level, thereby facilitating the planned reduction in net debt.
Based on the Group's performance for the first ten months of the year, the Board currently anticipates full year Underlying operating profit(1) will be in the range of GBP169 million to GBP171 million, marginally ahead of current market expectations. The Board continues to be positive about the trading environment in which the Group operates.
Onwards and upwards imo. |
Spirito, IMO Auto Trader was way overvalued at £4.00 and still is today. If I was a billionaire Dragon I sure wouldn't pay £3.5bn for a company that was making only £156m profit(EBITDA) a year. If I did then I might have to wait around 22 years just to break even. |
Why the huge fall? |
High rating catching up with it in these very tough markets, getting blasted at the moment, on paper it's massively overvalued imho however I've no idea where it will go from here (currently around the £3.63 mark), could bounce back to £4 or sink towards £3, all I know is I'm a value investor and I certainly wouldn't be buying this. |
I think it needs to fall back below £3.50 before I dip my toe in. |
Well, 470p is a 12 month target. Earnings are growing at over 100%; hence premium rating. |
AISHAH
My heart says this should reach 470 - but my brain says it will be later this year. A P/E of 61 is far too high in the current climate. |
Has a very high P/E of 61!! RMV is only 21. |
From the article:
"Auto Trader has about half the UK online classifieds market, with PistonHeads next-best with a share of just 10 per cent, Jefferies estimated.
That dominance should be enough to deliver annual earnings growth of 105 per cent over the next few years, analyst David Reynolds forecast."
Deserves a premium rating imo. |
Going to be well placed in the FTSE 100 come next quarters shuffle. Buy now before the Institutions do. |
Jefferies Reiterates BUY. Whopping upgrade to target price - 520p from 350p previously.
Another RMV in the making imo, dyor. |
AUTO in the reserve list for promotion to FTSE100:
FTSE UK Index Series Quarterly Review December 2015
© FTSE International Limited 2015. All Rights Reserved
FTSE 100 Index
Reserve List
SEDOL Company
0265274 Derwent London
BVYVFW2 Auto Trader Group
BMJ6DW5 Informa
BMHTPY2 Rexam
B2987V8 Rightmove
0822011 Smith (DS) |
It'll simply grow into any valuation attributed to it. Another RMV in the making. Bought RMV around £22, now £40+. What price here? Such a dominant position in it's market place. Dyor |
I enjoy cars and use the site about four times a week. But what an amazing share |
I bought in beginning of september up 14% for a share I plan to hold for 10 years |
MSCI GLOBAL STANDARD INDEXES
The following are changes in constituents for the MSCI Global Standard Indexes
which will take place as of the close of November 30, 2015.
MSCI UNITED KINGDOM INDEX
Additions
AUTO TRADER GROUP
PROVIDENT FINANCIAL |
Good post AisahNov 30th could provide even more positive momentum. £4 broken through now. |
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