| Auto Trader Group plc (GB00BVYVFW23) | |||
8,20 GBXStand (close): 03.07.25 |
 |
||
Nachrichten |
||
| Datum / Uhrzeit | Titel | Bewertung |
| 27.06.25 05:35:00 | With 88% institutional ownership, Auto Trader Group plc (LON:AUTO) is a favorite amongst the big guns |  |
| Key Insights Given the large stake in the stock by institutions, Auto Trader Group's stock price might be vulnerable to their trading decisions 51% of the business is held by the top 18 shareholders Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. To get a sense of who is truly in control of Auto Trader Group plc (LON:AUTO), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 88% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn). Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute. Let's take a closer look to see what the different types of shareholders can tell us about Auto Trader Group. View our latest analysis for Auto Trader Group LSE:AUTO Ownership Breakdown June 27th 2025 What Does The Institutional Ownership Tell Us About Auto Trader Group? Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index. We can see that Auto Trader Group does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Auto Trader Group, (below). Of course, keep in mind that there are other factors to consider, too.LSE:AUTO Earnings and Revenue Growth June 27th 2025 Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Auto Trader Group is not owned by hedge funds. Our data shows that BlackRock, Inc. is the largest shareholder with 9.6% of shares outstanding. For context, the second largest shareholder holds about 5.3% of the shares outstanding, followed by an ownership of 4.9% by the third-largest shareholder. Story Continues After doing some more digging, we found that the top 18 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company. While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too. Insider Ownership Of Auto Trader Group The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO. Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances. Our data suggests that insiders own under 1% of Auto Trader Group plc in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own UK£29m of stock. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling. General Public Ownership With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Auto Trader Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. Next Steps: It's always worth thinking about the different groups who own shares in a company. But to understand Auto Trader Group better, we need to consider many other factors. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 25.03.25 08:10:42 | Calculating The Fair Value Of Auto Trader Group plc (LON:AUTO) |  |
| Key Insights Using the 2 Stage Free Cash Flow to Equity, Auto Trader Group fair value estimate is UK£7.50 With UK£7.46 share price, Auto Trader Group appears to be trading close to its estimated fair value Analyst price target for AUTO is UK£8.52, which is 14% above our fair value estimate How far off is Auto Trader Group plc (LON:AUTO) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by estimating the company's future cash flows and discounting them to their present value. This will be done using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward. We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Is Auto Trader Group Fairly Valued? We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars: 10-year free cash flow (FCF) forecast 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (£, Millions) UK£295.6m UK£324.2m UK£351.2m UK£370.1m UK£386.6m UK£401.3m UK£414.7m UK£427.3m UK£439.4m UK£451.1m Growth Rate Estimate Source Analyst x9 Analyst x9 Analyst x9 Est @ 5.38% Est @ 4.45% Est @ 3.81% Est @ 3.36% Est @ 3.04% Est @ 2.82% Est @ 2.66% Present Value (£, Millions) Discounted @ 7.7% UK£274 UK£279 UK£281 UK£275 UK£267 UK£257 UK£246 UK£236 UK£225 UK£214 ("Est" = FCF growth rate estimated by Simply Wall St) Present Value of 10-year Cash Flow (PVCF) = UK£2.6b Story Continues The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.3%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.7%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = UK£451m× (1 + 2.3%) ÷ (7.7%– 2.3%) = UK£8.5b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= UK£8.5b÷ ( 1 + 7.7%)10= UK£4.1b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is UK£6.6b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of UK£7.5, the company appears about fair value at a 0.5% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.LSE:AUTO Discounted Cash Flow March 25th 2025 Important Assumptions We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Auto Trader Group as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.7%, which is based on a levered beta of 1.056. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for Auto Trader Group SWOT Analysis for Auto Trader Group Strength Earnings growth over the past year exceeded the industry. Debt is not viewed as a risk. Weakness Dividend is low compared to the top 25% of dividend payers in the Interactive Media and Services market. Opportunity Annual revenue is forecast to grow faster than the British market. Good value based on P/E ratio and estimated fair value. Threat Annual earnings are forecast to grow slower than the British market. Moving On: Valuation is only one side of the coin in terms of building your investment thesis, and it ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Auto Trader Group, there are three fundamental aspects you should assess: Financial Health: Does AUTO have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk. Future Earnings: How does AUTO's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every British stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 21.03.25 19:15:40 | Used Teslas pile up in Canada as Musk embraces politics | |
| The price of a used Tesla dropped 21.9 per cent year-over-year, while all other EVs listed on AutoTrader fell 16.3 per cent. (Credit: Stephen Llewellyn/The Daily Gleaner/Postmedia files) Now may be a good time to buy a used Tesla. As chief executive Elon Musk embraces conservative politics, his electric vehicles (EVs) are facing backlash such as protests, vandalized vehicles and charging stations being set ablaze, including two incidents in Calgary this week. It comes as the pace of EV adoption in Canada has slowed, but there are clear signs that Tesla is faring worse than some other EV makers. There are more used Teslas in Canada than ever, and the price is dropping faster than the rest of the market, according to Autotrader.ca Inc., the new and used vehicle marketplace. “I don’t know that we can attribute this to any one factor,” Baris Akyurek, vice president of insights and intelligence at AutoTrader.ca, said. “Overall, EV sales are going down, EV demand is down, so it’s hard to conclude what’s happening.” In early March, the number of used Teslas listed on AutoTrader was up 12.5 per cent on a year-over-year basis, while the number of all other EVs listed on AutoTrader declined 3.1 per cent. Tesla’s rising used inventory looks even more stark when measured against used internal combustion engine vehicle inventory on the site, which declined by 14.1 per cent during the time period. The price of a used Tesla dropped 21.9 per cent during the time period, while all other EVs listed on AutoTrader fell 16.3 per cent. “I wasn’t surprised by this,” Akyurek said. “We also look at the market in the U.S. and globally, and we saw this trend.” In the United States, Edmunds.com Inc., a California-based market research firm, said Tesla experienced its “highest-ever share” of trade-ins for new or used cars from dealerships selling other brands. In 2024, for the first time in more than a decade, Tesla delivered fewer vehicles than the previous year, albeit only one per cent less. It also reported an eight per cent decline in revenue from its automotive business in the fourth quarter of 2024. Since January, its stock has dropped 39 per cent to US$244.29 per share as of Friday afternoon. This week, the company recalled an estimated 46,000 Cybertrucks over concerns that an exterior panel could fall off. Musk, still the world’s richest man with a fortune estimated between US$350 billion and US$500 billion, has come under fire on a near-daily basis for his role overseeing what he calls DOGE — the U.S. Department of Government Efficiency — which is dismantling various U.S. federal government agencies in an attempt to slash spending or refashion government services. But Akyurkek said the average price of a used Tesla began falling in early 2023, which would predate his role in the Donald Trump administration. Of course, Musk has long courted controversy. Story Continues In 2022, Musk, also the owner of X, the social-media platform formerly known as Twitter, tweeted a meme that compared former prime minister Justin Trudeau to Adolf Hitler, but he deleted it. In 2023, Musk waded into controversy when he curtailed Ukraine’s use of satellite internet service provider Starlink, which is owned by another company he’s CEO of, Space Exploration Technologies Corp. Another factor clouding the situation, Akyurek said, is that the used car marketplace is in a bit of an odd place. The gyrations caused by the pandemic, supply chain shocks and the microchip shortage meant that Canada produced 1.5 million fewer cars between 2020 and 2023 than would have been expected under ordinary circumstances. That’s now catching up with the used vehicle marketplace because leases generally expire after about four years, pushing more vehicles into the used car marketplace. Regardless of what happens to Tesla, the EV transition in Canada is generally facing down a rough patch. Canadians in several cities join ’Tesla Takedown’ protests Trump says attacks on Tesla stores are domestic terrorism Even Musk fans dash for the sidelines as Tesla in freefall In 2024, EVs accounted for 13.8 per cent of the marketplace, or about 264,277 vehicles, with Quebec accounting for 53.9 per cent of that total. But in February, the first full month since the federal and Quebec’s provincial incentives to purchase an EV expired, sales collapsed, according to researcher DesRosiers Automotive Consultants Inc. DesRosiers did not disclose the exact drop, but said the decline in EV sales led to an overall automotive market decline of 21.9 per cent. • Email: gfriedman@postmedia.com Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here. |
||
| 19.03.25 16:35:41 | Car prices already creeping up as auto industry braces for tariff disruption | |
| Vehicles for sale at a Windsor car dealership this month. (Credit: DAN JANISSE/Postmedia) There are many uncertainties about how United States President Donald Trump’s tariffs will affect the auto industry, but sector insiders say one thing is all but certain: the price to buy a vehicle is about to go up and may already be rising. “The first economic effect we’ll see, and it’s a major one, is on car prices,” Charles Bernard, lead economist at the Canadian Automobile Dealers Association, said. “And our car prices aren’t necessarily cheap right now at the moment, so it won’t help something that was already a problem.” It all comes as a gut punch to some who believed the auto industry was just returning to a healthy state. The auto sector had been hit hard by inflation, with the average price of a new car in Canada rising 43.2 per cent between 2019 and 2025, and used car prices rose 39.5 per cent during the same timeframe, according to data from AutoTrader.com Inc., the vehicle marketplace. But in 2024, the average used car price declined by 12.1 per cent. Exactly how much car prices could rise again thanks to the latest tariffs is difficult to predict. J.D. Power earlier this month estimated that 25 per cent U.S. tariffs and counter-tariffs could add $6,000 to the price of a new vehicle, which is a 9.2 per cent increase given that the average new vehicle in Canada costs $64,600, according to Autotrader. But nearly everyone agrees that estimate is only a rough guess and there are many factors at play. Just two months into office, the Trump administration has unleashed a barrage of tariffs, threatened tariffs and reprieves that even economists are having a hard time keeping track of, let alone making sense of their combined impacts on the auto sector. At the beginning of March, the U.S. enacted 25 per cent tariffs on all Canadian goods that are not compliant with the Canada-United-States-Mexico Agreement (CUSMA), which could affect some auto parts manufactured here, though most vehicles are believed to be compliant. It also levied 25 per cent tariffs on Canadian steel and aluminum, both of which are large inputs for vehicles. Trump has further signalled that he plans to enact 25 per cent tariffs on April 2 on autos and additional 25 per cent “reciprocal“ tariffs on a sweeping set of goods, which would in effect match any costs that U.S. exporters face, such as goods and services taxes, that are not generally considered as trade duties. Analysts at S&P Global Mobility are predicting a 50 per cent probability of there being “an extended disruption” — one that lasts 16 weeks to 20 weeks — when vehicles that are more exposed to tariffs will slow or cease production. Story Continues “Consumers will face rising costs on all goods, reducing available funds and willingness and ability for purchasing durable goods,” Stephanie Brinley, associate director of autoIntelligence at S&P, said in a note on March 12. “We expect product development delays to have lasting effects into future years.” She said one “more dire scenario,” in which tariffs on vehicles produced in Canada and Mexico are integrated into the long-term trade structure on a permanent basis, has a 20 per cent probability of happening. Although this could increase U.S. manufacturing, she said it would increase costs and likely lead to a decline in vehicle sales. Brinley gives a 30 per cent probability for a “quick resolution” and tariffs disappearing in a month or less, but this would still lead to lower production due to supply chain issues and border gridlock. Eventually, many economists say the tariffs could lead to inflation or a recession, which will affect interest rates and consumer behaviour, including whether to purchase a vehicle. “With these tariffs in place, we would expect to see vehicle sales in these countries contract substantially,” Andrew Foran, an economist at TD Economics, said in a Jan. 28 note. Even 10 per cent tariffs could lead to a sales decline of light vehicles in Canada of around eight per cent, while a 25 per cent tariff could push the decline to around 13 per cent, he said. Since tariffs raise prices for consumers and businesses, people will have less money to spend and economic growth will weaken, Foran said. That leads to higher unemployment and stagflation, which is weak growth and high inflation combined. “We were so close to normalcy,” Baris Akyurek, vice-president of insights and intelligence at AutoTrader, said. “Everything was coming down, the demand was there, the supply was there, we were really close to normalcy and then this stuff happened.” He said used car prices are an important indicator because it’s the marketplace that absorbs demand when new car prices rise. Typically, he said, used car prices start the year high and then decline, but used car prices have risen 0.4 per cent so far in March. “It’s not by much yet, and it’s only 16 days of data, so this is not conclusive, but prices had been coming down,” Akyurek said. On the other hand, the average price of a new vehicle declined by 0.2 per cent. But he said there are other troubling signs in the marketplace. Sellers have stopped dropping their prices as often this year, with a 22 per cent year-over-year decline in the number of price drops amongst all vehicles listed on AutoTrader. Some dealerships in Canada are building up inventory now, which will provide a cushion against price increases for a period of time since those vehicles will not be affected by tariffs if they are imported before they go into effect. “It’s pretty clear what’s going on,” said Akyruek, who added that rises in price at this point “are inevitable.” EV skepticism builds amid tariff threats, headwinds Canadian auto parts stocks thrown into tailspin by tariff woes Why Trump tariffs are a bigger threat to Stellantis • Email: gfriedman@postmedia.com Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here. |
||
| 03.03.25 06:00:00 | Should you buy an electric car – or stick to petrol? Use our calculator | |
| electric car Electric cars are a lightning rod: some owners are evangelical, while other drivers think they are overpriced and overrated. But they are the future. Auto Trader has forecast a tenfold leap in the number of electric cars on our roads over the next decade, from just under 1.3 million to over 13 million. So does it make financial sense now to switch to electric? Or would you save money in the long run with a new combustion engine car instead? It depends on several factors including the type of car you drive, your mileage and (crucially) whether you have a driveway. Use our tool to find out whether it’s time to take the plunge. How the calculator works Example 1 Say you drive 10,000 miles a year and are considering buying either a petrol hatchback or an electric hatchback. If you don’t have a driveway or a way of charging an electric car at home, you will have to rely on public charging points, which are far more expensive. The calculator indicates that, in purely financial terms, it is probably not worth making the switch as your total costs would not be lower with an electric car within ten years. Even if you re-ran the calculator with the same information, but this time said you did have home charging, it still would not be cheaper to run an electric car than a petrol one within a decade of purchasing. Of course, many things could change over ten years. The price to charge at public points could dramatically drop or the premium currently paid for an electric car over a petrol or diesel equivalent (assumed to be £12,500 in the calculator) could disappear. And there are other reasons people may decide to switch, from preferring the modern aesthetics of a Tesla, for instance, to concern over air quality. Example 2 This time we’re assuming you drive 20,000 miles a year, want to buy a hatchback and that you have a driveway. Now the calculator suggests the break even point – when the total cost of an electric car becomes lower – is at around eight years. Example 3 We’re still assuming an annual mileage of 20,000 but this time you want to buy an SUV. Now, the break even point is just three years, because SUVs using internal combustion engines guzzle petrol or diesel at a high rate. It should be noted that the calculator results are merely indicative. Comparing fuel efficiency is very difficult as there are many factors at play and the calculator assumes an average efficiency for electric cars but has more precise estimates for petrol/diesel equivalents. Why are buyers cautious about going electric? Affordability remains a major sticking point: electric cars tend to cost more than their petrol or diesel equivalents. This was found to be the single biggest barrier for would-be buyers, according to a survey by YouGov. Story Continues But this premium is plummeting. Electric cars were 59pc more expensive on average in January 2020, according to Auto Trader, but five years later it had dipped below 25pc for the first time. This is equivalent to an average of £12,500, which is reflected in our calculator as an upfront cost for an electric car. Leasing is of course an option, but in this analysis we are focussing on outright purchases alone. The Government is also stripping away the relative tax advantages of electric cars. When first registered, the rate of Vehicle Excise Duty (VED) depends on carbon dioxide emissions – this covers the car for 12 months. Electric cars used to be exempt from this so-called “showroom tax”, but the Chancellor has imposed a charge of £10 from April. This remains, however, considerably lower than the £540 average for a new mid-sized petrol car. From the second year onwards, all new cars – including electric – will pay the standard VED rate of £195. An expensive car supplement is added on top of this for five years if the list price exceeds £40,000. This is set at £425 per year for 2024-25, bringing the total road tax bill to £620. The exemption sparing electric cars is also ending in April, meaning the tax advantage of an electric car is much less advantageous. Have a driveway? Electric cars make a lot more sense Savings, therefore, mostly come down to the cost of refuelling versus recharging. Combustion engine drivers are at the mercy of the forecourt. Petrol was about 7p per litre cheaper than diesel at the start of 2025, but diesel cars tend to be more efficient and so will likely prove more economical over 1,000 miles. When you have an electric car, the advantage of having a driveway – and so being able to charge at home – is huge. According to Zapmap, rates at public charging points have hovered around 80p/kWh over the past year. Off-peak home rates, meanwhile, came in 10 times cheaper at 8p/kWh. Many energy providers now offer two-rate tariffs, which supply electricity to homes at much lower rates at night. After affordability, the next most-cited concerns about buying an electric car, according to YouGov, both relate to range: a lack of charging infrastructure, and a worry the car will have low mileage at full charge. According to the Electric Vehicle Database, the current average range of cars currently on the market is just over 230 miles. Many new petrol cars, on the other hand, can go up to 400 miles on a full tank, with diesels often surpassing 500. How far you get on a single tank or charge is largely dependent on driving style and usage. The UK is now expected to have more public charging points than fuel nozzles. The number of forecourts has been in decline for years, falling by a third since 2000 to just over 8,000. Charging points, on the other hand, are multiplying. There were 73,334 in January 2025 – up by 36.5pc in 12 months. Of those, just under one in five offered rapid or ultra-rapid speeds – whose fastest connector is above 25kW and 100kW respectively – allowing for 80pc battery charge in as little as 30 minutes, according to Zapmap. Over the longer term, it is also worth considering that while electric cars tend to be more reliable, a shortage of qualified technicians in some areas could push up repair costs. The Institute for the Motor Industry forecasts a shortfall of 16,000 by 2035. Battery life shouldn’t be a worry: recent research by Which? found they lost between 1pc and 2pc of their capacity each year, with little change in engine efficiency. Most manufacturers offer a 100,000-mile, eight-year battery warranty. Despite this, residual values – what a car is worth when it’s time to trade in – are considerably lower. Auto Trader found that a typical electric car halves in value after three years, at which point petrol and diesel cars had fallen by just a third. Ian Plummer, of Auto Trader, said: “New electric vehicles still maintain a price premium, but this has dropped dramatically over time and more affordable models from both new and established brands are helping to close the gap. “With running cost savings of around £660 a year, compared to petrol and if you’re charging at home, there are plenty of reasons why now is a great time to consider electric – especially if you have a driveway.” View Comments |
||
| 08.02.25 09:40:23 | Could The Market Be Wrong About Auto Trader Group plc (LON:AUTO) Given Its Attractive Financial Prospects? | |
| It is hard to get excited after looking at Auto Trader Group's (LON:AUTO) recent performance, when its stock has declined 1.8% over the past week. However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. In this article, we decided to focus on Auto Trader Group's ROE. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. Check out our latest analysis for Auto Trader Group How Do You Calculate Return On Equity? Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Auto Trader Group is: 49% = UK£280m ÷ UK£576m (Based on the trailing twelve months to September 2024). The 'return' is the profit over the last twelve months. Another way to think of that is that for every £1 worth of equity, the company was able to earn £0.49 in profit. Why Is ROE Important For Earnings Growth? So far, we've learned that ROE is a measure of a company's profitability. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes. Auto Trader Group's Earnings Growth And 49% ROE To begin with, Auto Trader Group has a pretty high ROE which is interesting. Secondly, even when compared to the industry average of 32% the company's ROE is quite impressive. Probably as a result of this, Auto Trader Group was able to see a decent net income growth of 9.3% over the last five years. As a next step, we compared Auto Trader Group's net income growth with the industry and were disappointed to see that the company's growth is lower than the industry average growth of 28% in the same period.LSE:AUTO Past Earnings Growth February 8th 2025 The basis for attaching value to a company is, to a great extent, tied to its earnings growth. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Is AUTO fairly valued? This infographic on the company's intrinsic value has everything you need to know. Story Continues Is Auto Trader Group Efficiently Re-investing Its Profits? With a three-year median payout ratio of 34% (implying that the company retains 66% of its profits), it seems that Auto Trader Group is reinvesting efficiently in a way that it sees respectable amount growth in its earnings and pays a dividend that's well covered. Moreover, Auto Trader Group is determined to keep sharing its profits with shareholders which we infer from its long history of nine years of paying a dividend. Based on the latest analysts' estimates, we found that the company's future payout ratio over the next three years is expected to hold steady at 33%. Therefore, the company's future ROE is also not expected to change by much with analysts predicting an ROE of 53%. Conclusion On the whole, we feel that Auto Trader Group's performance has been quite good. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a respectable growth in its earnings. We also studied the latest analyst forecasts and found that the company's earnings growth is expected be similar to its current growth rate. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 06.02.25 07:00:00 | The cheap Chinese cars about to flood the UK market – but are they worth it? | |
| The UK’s tariff-free arrangement means Chinese EVs are much more affordable – for now - Lillian Suwanrumpha/AFP The Sealion, Seagull and Dolphin. No, this is not the title of an unpublished children’s book. This selection of aquatic creatures is a range of car models poised to surge in sales this year. Manufactured by Build Your Dreams (BYD), the cars are part of the Chinese influx flooding the UK’s electric vehicle market. Omoda, Aiways, Nio, Seres, Haval, XPeng and Zeekr are among the other lesser-known names planning to launch or increase their presence in the UK. As the rollout of new names continues, Auto Trader predicts Chinese-branded models could account for up to 25pc of Britain’s electric fleet by 2030. But are they worth it? Telegraph Money delves into whether 2025 is the year to buy a Chinese electric vehicle (EV). Are Chinese electric cars cheap? Chinese EVs are notoriously cheap. Figures from Auto Trader show that new Chinese entrants have helped boost the number of sub-£30,000 EV options in UK showrooms – going from a lowly nine last year, to 29 at the turn of 2025. That’s not to say, however, that price tags in Britain are as affordable as they can be. Many RRP prices are much lower in China – for example, the list price of BYD Dolphin can be as much as £10,000 less than it is listed for in the UK. Ginny Buckley, of Electrifying.com – a site specialising in EV and hybrid vehicles, said: “Chinese cars are almost always cheaper than European models, although there are some exceptions. “For example, the Ora 03 was considered expensive and has had very slow sales. In response, £6,000 has now been knocked off its list price to bring it in line with the market.” Due to the zero-emission mandate, European manufacturers have been forced to offer heavy discounts, meaning “their models are often just as affordable – if not cheaper – than the Chinese alternatives”, said Ms Buckley. Will prices reduce in 2025? The UK remains the only Western country not imposing tariffs on Chinese-made cars, allowing list prices to remain highly competitive. But there’s no guarantee it will stay that way. Experts believe Donald Trump’s trade war with China could spell the end of the UK’s lenient approach to Chinese imports. David Henig, director of the UK Trade Policy Project, said: “The US might say it will put a 10pc tariff on goods from the UK unless the UK takes action against China.” Sir Keir Starmer is also likely to face pressure from domestic industry to help manufacturers struggling to compete with Chinese EVs’ low production costs. The Biden administration introduced 100pc tariffs on Chinese EVs last year and announced a ban on Chinese car-connected technology, while the EU, which could similarly push for the UK to back its stance, approved tariffs in October. Story Continues Brussels has imposed extra duties of 17.4pc on cars made by BYD, 20pc on those made by Volvo-owner Geely and 38pc for SAIC. The measures – on top of existing 10pc tariffs – are designed to protect European carmakers, which have complained they are being unfairly undercut. Are Chinese EVs any good? In assessing Chinese electric SUV models in November, Telegraph car reviewer, Andrew English, concluded that the country’s cars “aren’t good enough”. He wrote: “Chinese products, while cheap, are inferior in both the tangibles of quality of the interior, driving range and noise suppression, but also in more intangible qualities such as dynamic ride and handling. “They also come from a different culture where hi-tech electronics, touchscreens and voice commands are considered highly desirable rather than confusing, distracting and generally a bad idea.” As the years go on, however, it’s expected that the quality will improve. Prices are currently pushing downwards, but if Chinese carmakers achieve better quality, prices will likely begin to bulge. Stuart Masson, of The Car Expert, offers a different perspective on the current state of Chinese cars. He said: “The reality is they’re not just cheap rubbish cars. Their quality is very good. “The Chinese car industry has the same strengths and weaknesses as any other. If you’re buying a budget car, you’re not going to get the same quality as if you’re buying a premium car.” Do British drivers trust Chinese electric cars? A lack of trust and suspicion continues to prevail among British drivers. Research by Auto Trader found 41pc of people aged 55 and over were concerned by data security and privacy risks in relation to Chinese motors. Ian Plummer, of the marketplace, said: “Consumer trust in the quality and safety of these new entrants remains mixed, particularly among older buyers. “To succeed, Chinese brands will need to focus on reassuring consumers through strong safety ratings, data security, expert reviews, and customer service that they are as good as the more trusted traditional manufacturers.”The MG brand could be a winning formula for Chinese EVs – a familiar and trusted brand in Britain but now owned by SAIC Mr Masson said: “People are buying them on a practical level. It’s head-over-heart rather than on an emotional level. “It will take time to change that. People will buy their car, realise that it’s actually pretty decent and be happy to buy another one. So it takes a generation of ownership, and ownership tends to be a four-year cycle. “China has always been playing the long game, it isn’t worried about four-year cycles.” The MG brand is still cosy and familiarly British, but it’s well-known to most that its rejuvenation has come under the ownership of SAIC – a Chinese government-owned car manufacturer. The brand is trusted in the UK, showing that Chinese firms can hit a winning formula by taking on a legacy name. Its new MG3, a hatchback which starts from £26,995, is predicted to “depreciate quite slowly”, according to What Car?, retaining more of its list price after three years than all of its rivals, including the VW Polo. Ms Buckley said: “When it comes to residual values, MGs generally hold their value well, but cars from other Chinese brands are not yet on the market in large numbers. It’s hard to assess their long-term depreciation.” For those pondering whether to buy a Chinese EV this year, Mr Masson said “there is no reason not to buy one unless you definitely don’t want to”. Do Chinese electric cars spy on you? Last autumn, the Biden administration raised the alarm about the growing prevalence of Chinese components in electric and future self-driving vehicles, as it outlined plans to ban components “with a sufficient nexus” to China. The US Department of Commerce said that “malicious access” could allow enemies to “remotely manipulate cars on American roads”. China’s foreign ministry called the move “discriminatory”, but security experts say there is a genuine fear that the West is becoming exposed to Chinese components under the bonnet. Ciaran Martin, the former head of the National Cyber Security Centre, GCHQ’s defence arm, last year dismissed concerns that someone in China could take control of thousands of cars. “They’re not capable of magic,” he said. Others have suggested cars should be the least of drivers’ Big Brother concerns, with the vast array of household technology already being made in China. Will the Chinese EV powerhouse continue? One in three vehicles is now built in China, while the other two-thirds are full of Chinese components. It’s not a new phenomenon, either. The Asian country has been the world’s largest car-producing country for the past 15 years, and it churned out more cars in 2024 than the UK has in the past quarter of a century. Mr Masson said: “The scale is staggering and the high-cost Western world can’t compete with it. Whether it’s electric, petrol, diesel, fairy dust, there is no competition for that monster of an industry.” This year is poised to be a high-flying one for BYD, the brand which has rivalled Tesla as the world’s biggest EV manufacturer. It’s aiming to be in the top three brands in Europe by the end of the decade, and plans to have 100 dealerships in the UK by the end of 2025. Whether it will succeed remains to be seen. 2024 was its first full year in British showrooms, when BYD sold 8,788 cars – the equivalent to one in 200 vehicle sales. That’s half the number of units sold by Jaguar. Ms Buckley said: “I’m not convinced we’ll see Chinese brands take over the car industry overnight. Some brands will succeed and become major players in the UK and Europe, but many will struggle.” Is it worth buying a Chinese EV this year? The growth of Chinese cars in the UK is undeniably causing a major shake-up in the industry, so watching what unfolds from afar could be the best option. The Government’s zero-emission mandate, which compels car makers to sell rising proportions of EVs, will again play a role in legacy manufacturers to cut list prices. In January, the average discount on a new EV was 11.5pc off the RRP, compared with 4.8pc two years ago, according to Auto Trader. Yes, it could make sense to grab a low-cost Chinese model now in case tariffs are introduced, but the threat of Chinese brands swallowing up the market is also causing better-known brands to drop prices. Ms Buckley said: “More affordable models like the Citroën ë-C3 and the upcoming Vauxhall Frontera are direct responses to the growing Chinese competition.” Mr Plummer said: “These new entrants are setting new standards in car design, technology and production, forcing all brands to work harder to attract buyers.” The same goes for China. A flood of new cars is hitting the British market this year, but China’s ability to significantly improve its technology in a short space of time could almost immediately render this year’s fleet out of date. View Comments |
||
| 30.01.25 00:01:00 | Surge of Chinese EVs in UK sparks privacy concerns among older consumers – poll | |
| The charge of Chinese electric car brands into the UK market is sparking privacy concerns among older consumers, a new survey suggests. Some 41% of people aged 55 and above have fears over data security and privacy risks when buying Chinese products, the poll commissioned by online vehicle marketplace Auto Trader indicated. Meanwhile, 43% of respondents in the same age group said they mistrust the quality of the goods. The greatest support comes from those aged 17-34, with 57% of this group attracted by factors such as innovative technology and affordability. Chinese brands including BYD, GWM and Omoda are gaining ground in the UK automotive market. An Auto Trader report forecast that Chinese companies could hold a share of up to 25% of the UK’s new electric vehicle market by 2030, which is when the Government has pledged to ban the sale of new petrol and diesel cars. Ian Plummer, commercial director at Auto Trader, said: “Chinese brands are increasingly pivotal players in the UK’s electric transition. “Their ability to offer affordable, high-quality electric vehicles is winning over the younger drivers who will play a vital role in driving the widespread adoption of electric vehicles. “But the rise of Chinese brands comes with challenges. “Consumers’ trust in the quality and safety of these new entrants remains mixed, particularly among older buyers. “To succeed, Chinese brands will need to focus on reassuring consumers – through strong safety ratings, data security, expert reviews and customer service – that they are as good as the more trusted traditional manufacturers.” Dr Andy Palmer, former chief executive of Aston Martin and operating chief of Nissan, who founded Palmer Energy which supplies home, commercial and grid scale batteries, said: “Smart electronics and AI software are a phenomena of our time, and proliferate into almost everything we own. “For some, this has raised concern about the growth in Chinese EVs and the risk of spying. “We should be cognisant of the risk but not attribute this only to China and only to EVs. The same functions can exist on internal combustion cars, and the risk from phones is probably greater.” – The nationally representative survey of 3,985 UK consumers was conducted by research company QuMind in November 2024. View Comments |
||
| 18.12.24 12:22:19 | Investors in Auto Trader Group (LON:AUTO) have seen decent returns of 42% over the past five years | |
| Stock pickers are generally looking for stocks that will outperform the broader market. And in our experience, buying the right stocks can give your wealth a significant boost. To wit, the Auto Trader Group share price has climbed 35% in five years, easily topping the market decline of 1.9% (ignoring dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 15%, including dividends. With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies. See our latest analysis for Auto Trader Group To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. During five years of share price growth, Auto Trader Group achieved compound earnings per share (EPS) growth of 7.0% per year. So the EPS growth rate is rather close to the annualized share price gain of 6% per year. This indicates that investor sentiment towards the company has not changed a great deal. Rather, the share price has approximately tracked EPS growth. You can see below how EPS has changed over time (discover the exact values by clicking on the image).LSE:AUTO Earnings Per Share Growth December 18th 2024 We know that Auto Trader Group has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Auto Trader Group will grow revenue in the future. What About Dividends? It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Auto Trader Group, it has a TSR of 42% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments! A Different Perspective It's nice to see that Auto Trader Group shareholders have received a total shareholder return of 15% over the last year. And that does include the dividend. That's better than the annualised return of 7% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Before forming an opinion on Auto Trader Group you might want to consider these 3 valuation metrics. Story Continues If you are like me, then you will not want to miss this freelist of undervalued small caps that insiders are buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 15.10.24 14:45:07 | Calculating The Intrinsic Value Of Auto Trader Group plc (LON:AUTO) | |
| Key Insights Auto Trader Group's estimated fair value is UK£8.30 based on 2 Stage Free Cash Flow to Equity Auto Trader Group's UK£8.77 share price indicates it is trading at similar levels as its fair value estimate The UK£8.45 analyst price target for AUTO is 1.8% more than our estimate of fair value Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Auto Trader Group plc (LON:AUTO) as an investment opportunity by taking the forecast future cash flows of the company and discounting them back to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Believe it or not, it's not too difficult to follow, as you'll see from our example! We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. See our latest analysis for Auto Trader Group Crunching The Numbers We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 10-year free cash flow (FCF) estimate 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (£, Millions) UK£305.9m UK£340.2m UK£367.4m UK£387.7m UK£405.0m UK£420.0m UK£433.3m UK£445.4m UK£456.7m UK£467.4m Growth Rate Estimate Source Analyst x7 Analyst x7 Analyst x7 Est @ 5.54% Est @ 4.45% Est @ 3.70% Est @ 3.17% Est @ 2.80% Est @ 2.54% Est @ 2.35% Present Value (£, Millions) Discounted @ 7.1% UK£286 UK£297 UK£299 UK£295 UK£288 UK£279 UK£269 UK£258 UK£247 UK£236 ("Est" = FCF growth rate estimated by Simply Wall St) Present Value of 10-year Cash Flow (PVCF) = UK£2.8b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (1.9%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.1%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = UK£467m× (1 + 1.9%) ÷ (7.1%– 1.9%) = UK£9.3b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= UK£9.3b÷ ( 1 + 7.1%)10= UK£4.7b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is UK£7.4b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of UK£8.8, the company appears around fair value at the time of writing. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. dcf Important Assumptions The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Auto Trader Group as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.1%, which is based on a levered beta of 1.061. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. SWOT Analysis for Auto Trader Group Strength Earnings growth over the past year exceeded the industry. Debt is not viewed as a risk. Weakness Dividend is low compared to the top 25% of dividend payers in the Interactive Media and Services market. Expensive based on P/E ratio and estimated fair value. Opportunity Annual revenue is forecast to grow faster than the British market. Threat Annual earnings are forecast to grow slower than the British market. Moving On: Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. DCF models are not the be-all and end-all of investment valuation. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Auto Trader Group, there are three additional items you should further research: Financial Health: Does AUTO have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk. Future Earnings: How does AUTO's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the LSE every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View comments |
||
