Analyst Note| Gareth James, CFA |
We have increased our fair value estimate for narrow moat rated Carsales.com by 8% to AUD 21.00 per share following its fiscal 2021 financial result. The fair value increase is driven by a combination of slightly higher long-term earnings forecasts, due to an improving long-term outlook, and the time-value-of-money boost to our financial model. In summary, Carsales.com is making steady progress towards becoming a global automotive platform and continues to open new revenue sources via innovation. Fiscal 2021 was characterised by the strongest underlying NPAT growth rate and margin for eight years, despite the tough trading environment, reflecting the strength and quality of the company.