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    CAR Group (ASX:CAR) Shares Command Premium As Margins And EPS Strengthen

    Simply Wall St·08/11/2026 09:36:29
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    CAR Group heads into the post result trade with the stock at A$29.37 after a strong few months, yet the real story sits inside the profit engine. Full year net income reached A$313.7m on A$1.25b in revenue and earnings per share over the last twelve months landed at A$0.83. That combination keeps the P/E multiple elevated at 35.5x and squarely in focus for investors weighing how much growth in this online classifieds business they are willing to pay for over the next few years.

    Is CAR Group a growth story still priced for perfection, or does the A$29.37 share price sit below what the cash flows imply you are getting? Compare the rich 35.5x P/E against the DCF gap on our valuation analysis for CAR Group

    FY 2026 Earnings Summary

    • Revenue (FY 2026 vs FY 2025 TTM): A$1,253.43m vs. A$1,183.86m (up about 5.9%)
    • Net Income, excluding extra items (FY 2026 vs FY 2025 TTM): A$313.69m vs. A$274.22m (up about 14.4%)
    • Basic EPS (FY 2026 vs FY 2025 TTM): A$0.83 per share vs. A$0.73 per share (up about 14.2%)
    • Net Profit Margin (FY 2026 vs FY 2025 TTM): 25.0% vs. 23.2% (margin improved year on year)

    Prefer clean charts instead of another wall of financial tables and footnotes? See CAR Group's full visual story, including how the current P/E and earnings profile fit into the broader valuation picture, in the company report for CAR Group.

    ASX:CAR Trailing 12-Month Revenue & Expenses Breakdown as at Aug 2026
    ASX:CAR Trailing 12-Month Revenue & Expenses Breakdown as at Aug 2026

    CAR Group bull case hinges on cash engine

    Bulls argue CAR Group is a high quality compounder where very high gross margins, strong EBITDA and near mid 90s free cash flow conversion support a long runway of compounding. The latest year keeps that story broadly intact. Revenue of A$1.25b and net income of A$313.7m translate to a 25.0% net margin, up from 23.2%. Basic EPS of A$0.83 is ahead of the prior A$0.73. That points to solid operating leverage rather than pure financial engineering. The mix also matters for this thesis. Management highlights international platforms, dealer subscriptions and value added services and AI tools as growth drivers. These are consistent with a scalable asset light classifieds model that can turn incremental revenue into profit. The key bull milestone of strong cash generation on a growing earnings base looks supported by the higher margin and EPS print.

    Bear case on CAR Group tests cyclicality risks

    Bears focus on acquisition risk, cyclicality at Trader Interactive, heavy goodwill and the chance that AI erodes marketplace search economics. The latest numbers do not resolve those concerns but they also do not show obvious stress. Net income of A$313.7m on A$1.25b of revenue and higher EPS suggest the group has not yet run into a visible profit squeeze from softer segments or FX swings. The improvement in net margin to 25.0% from 23.2% implies that any weakness in areas like U.S. RV or powersports has been offset elsewhere. However, the reliance on acquired platforms and intangibles remains in place and the article’s own risk list around potential impairments, further equity funded deals and AI disintermediation still stands as an unresolved overhang rather than a risk that this set of results clearly reduces.

    After heavy use of acquisitions and with debt and dividend cover already flagged as pressure points, review whether these issues hint at deeper weaknesses in CAR Group by scanning the risk analysis for CAR Group which shows 2 important warning signs.

    Stay Ahead With CAR Group Insights

    If the mix of high margins, strong cash generation and a 35.5x P/E makes CAR Group worth tracking closely, register for free with Simply Wall St and add it to a Watchlist to watch how the share price moves against fair value and wait for an entry point that suits you. Once you are invested, use the Portfolio Command Center to cut through noise and focus on the key updates that matter for your holdings. For a longer term view, lean on the Community to see how other investors are thinking about CAR Group and similar stocks. This way you can surface potential catalysts and risks early and stay a step ahead of the market.

    Seeking Alternatives Beyond CAR Group?

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    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.