Why are Carsales.com (ASX:CAR) shares in the spotlight?

  • November 09, 2020 01:33 PM AEDT
  • Team Kalkine
    Team Kalkine
    Team Kalkine
    16932 Posts

    Team Kalkine comprises of experts who understand various markets nuances and are enthusiastic and passionate to provide best possible offerings in the form of insights and stories. The team has rich experience of working across different markets with...

Why are Carsales.com (ASX:CAR) shares in the spotlight?


  • Carsales.com shares have delivered ~41% return in the last one year and nearly 18% in the previous three months, bringing them under the market participants’ radar.
  • The online automotive business is well-funded and has strong liquidity. The Company’s robust cash generation would help fund growth capital and dividends.

Carsales.com Limited (ASX:CAR) shares have been in the spotlight since they have witnessed a significant growth of 17.60% in the last three months and 40.82% in the previous one-year. The increase in the share price reflects both business performance and positive investor sentiment.

At AEDT 01:44 PM, CAR shares are trading at A$22.250, up 2.818% from the previous close. Carsales.com has a market cap of A$5.33 billion.

Carsales.com Limited provides world-class technology and advertising solutions. The Company is a leading online automotive business in Australia and is also expanding across Latin America and Asia. The Company made its ASX debut on 10 September 2009. From 14 October 2009 till 14 October 2020, Carsales.com has delivered strong shareholder returns of 556%.

A Quick Glance at FY2020 Results

  • Despite the COVID-19 impact in 2H FY2020, the business delivered growth across Domestic and International businesses.
  • Reported financial metrics were below the previous corresponding period majorly because of COVID-19 dealer support package.
  • Reported revenue, EBITDA and NPAT dropped by 5%, 5% and 9% respectively.
  • Final dividend remained flat compared to the pcp at 25 cents per share.

COVID-19 Response and Emerging Trends:

During the COVID-19 pandemic period, the business had three priorities - protecting its people, supporting customers and industry, and strengthening the business.

During this period, the Company noted strong growth in car ownership demand plus the platform traffic because of the below reasons:

  • Improvement in Online migration: COVID-19 led to an increased preference for online shopping. People preferred online shopping over traditional retail approach. In a CAR-conducted survey, it was found that 77% of the people chose shopping for their car online.
  • Alternative transport options: Due to the pandemic, people preferred using their cars instead of taking any public transport or using rideshare. Further, limited air travel also aided the surge in car ownership.
  • Government initiatives: Stimulus initiatives implemented by the Federal Government resulted in improved demand for vehicles.

How is the business positioned for growth?

CAR business is well-placed to continue providing long-term shareholder value via outstanding capability, coverage to global growth markets along with investment in new products and services.

The increasing international contribution is also supporting business growth. Presently, the international business contributes over 24% look-through revenue and 19% of look-through EBITDA. In FY2020, look-through revenue and EBITDA grew by 13% and 20% respectively.

Business Strategy

Carsales.com has three strategic priorities:

  1. Grow its leadership in digital automotive classified solutions for consumer & commercial customers.
  2. Build a robust ecosystem of services that assist dealers, OEMs, corporate & private customers through the buying, selling and ownership of vehicles.
  3. Using customer perceptions and industry trends to look for new prospects in core and adjacent markets, and beyond.

Key Observations - FY2021

  • CAR would focus on managing cost.
  • It would be investing in product and market-leading positions.
  • There are positive trends due to COVID-19 for the Company including constant digital adoption, and improved tendency for car ownership.
  • CAR’s business is well funded. The Company has strong liquidity, and the robust cash generation would help to fund growth capital and dividends.



The website https://kalkinemedia.com/au is a service of Kalkine Media Pty. Ltd. (Kalkine Media) A.C.N. 629 651 672. The principal purpose of the content on this website is to provide factual information only and does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform. In providing you with the content on this website, we have not considered your objectives, financial situation or needs. You should make your own enquiries and obtain your own independent advice prior to making any financial decisions.
Some of the images that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed on this website unless stated otherwise. The images that may be used on this website are taken from various sources on the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image. The information provided on the website is in good faith, however Kalkine Media does not make any representation or warranty regarding the content, accuracy, or use of the content on the website.


We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK