8:09 am, June 5, 2023
Auto Trader Group’s share price is predicted to rise by 10 per cent, new analysis has said.
In a market report, Zeus Capital estimated the company’s share price to be 679p – previously 631p, which would be a 10 per cent uplift – off the back of strong FY23 results published last week.
Accounts showed pre-tax profits dipped by two per cent to below £300m, but the year was hailed as a success by Auto Trader bosses.
Zeus said the platform’s strong website traffic, record-high average revenue per retailer, and investments the business is making were the basis of its positive outlook.
It also added that Auto Trader Group’s EBIT estimates for FY24 remain ‘unchanged but with a change in mix’ with ‘slightly lower’ sales for its Autorama division.
Zeus expects the group’s operating margin to improve to 60.1 per cent, however, die to lower deferred consideration P&L charges and profitability for the Autorama to improve.
In the update, Zeus concluded: ‘Auto Trader’s FY23 results last week showed continued strong performance from its core marketplace business despite constrained supply in new and used vehicles.
‘Group results were broadly in line with Zeus revenue estimates and ahead on most measures of profitability. Car demand remains robust, Auto Trader website visits are above pre-pandemic levels, and average revenue per retailer is at a record high.
‘With the investment the Group is making, we continue to believe Auto Trader has the long-run opportunities to grow revenue at high margins.’
