Auto Trader Group (LSE:AUTO) - Share price, News & Analysis

Q: What is the Fair Price of AUTO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

AUTO (£5.42) is trading below our estimate of [[fair value]] (£5.69)

AUTO fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	3/6
Past Performance	6/6
Financial Health	6/6
Dividends	2/6

AUTO Stock Overview

Auto Trader Group plc operates in the digital automotive marketplace in the United Kingdom and Ireland.

Rewards

Trading at 4.7% below our estimate of its fair value

Earnings are forecast to grow 5.02% per year

Earnings grew by 91.5% over the past year

Risk Analysis

No risks detected for AUTO from our risk checks.

Auto Trader Group Competitors

Rightmove

LSE:RMV

UK£4.7b

Moneysupermarket.com Group

LSE:MONY

UK£936.8m

XLMedia

AIM:XLM

UK£77.3m

Audioboom Group

AIM:BOOM

UK£145.8m

Price History & Performance

Summary of all time highs, changes and price drops for Auto Trader Group
Historical stock prices
Current Share Price	UK£5.42
52 Week High	UK£7.51
52 Week Low	UK£4.99
Beta	0.33
1 Month Change	-7.60%
3 Month Change	-16.59%
1 Year Change	-15.65%
3 Year Change	-1.92%
5 Year Change	45.87%
Change since IPO	111.80%

Recent News & Updates

May 30

Estimating The Fair Value Of Auto Trader Group plc (LON:AUTO)

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Auto Trader Group plc...

Shareholder Returns

	AUTO	GB Interactive Media and Services	GB Market
7D	-1.4%	-2.5%	-1.1%
1Y	-15.7%	-38.5%	-9.7%

Return vs Industry: AUTO exceeded the UK Interactive Media and Services industry which returned -38.5% over the past year.

Return vs Market: AUTO underperformed the UK Market which returned -9.7% over the past year.

Price Volatility

Is AUTO's price volatile compared to industry and market?
AUTO volatility
AUTO Average Weekly Movement	4.3%
Interactive Media and Services Industry Average Movement	6.1%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.6%
10% least volatile stocks in GB Market	2.8%

Stable Share Price: AUTO is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: AUTO's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1977	1,002	Nathan Coe	https://www.autotrader.co.uk

Auto Trader Group plc operates in the digital automotive marketplace in the United Kingdom and Ireland. The company provides vehicle advertisement on its websites for private sellers, as well as insurance and loan financing products to consumers; and display advertising on its websites for manufacturers and their advertising agencies. It offers its products to retailers, home traders, and logistics firms.

Auto Trader Group Fundamentals Summary

How do Auto Trader Group's earnings and revenue compare to its market cap?
AUTO fundamental statistics
Market Cap	UK£5.11b
Earnings (TTM)	UK£244.70m
Revenue (TTM)	UK£432.70m

20.9x

P/E Ratio

11.8x

P/S Ratio

Is AUTO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
AUTO income statement (TTM)
Revenue	UK£432.70m
Cost of Revenue	UK£0
Gross Profit	UK£432.70m
Other Expenses	UK£188.00m
Earnings	UK£244.70m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.26
Gross Margin	100.00%
Net Profit Margin	56.55%
Debt/Equity Ratio	0%

How did AUTO perform over the long term?

See historical performance and comparison

Dividends

1.5%

Current Dividend Yield

32%

Payout Ratio

Does AUTO pay a reliable dividends?

See AUTO dividend history and benchmarks

When do you need to buy AUTO by to receive an upcoming dividend?
Auto Trader Group dividend dates
Ex Dividend Date	Aug 25 2022
Dividend Pay Date	Sep 23 2022
Days until Ex dividend	52 days
Days until Dividend pay date	81 days

Does AUTO pay a reliable dividends?

See AUTO dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is AUTO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for AUTO?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for AUTO. This is calculated by dividing AUTO's market cap by their current preferred multiple.
What is AUTO's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£5.11b

AUTO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	11.7x
Enterprise Value/EBITDA	16.7x
PEG Ratio	4.2x

Price to Earnings Ratio vs Peers

How does AUTO's PE Ratio compare to its peers?

AUTO PE Ratio vs Peers

The above table shows the PE ratio for AUTO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	21.3x
RMV Rightmove	25.8x	6.4%	UK£4.7b
MONY Moneysupermarket.com Group	17.8x	18.6%	UK£936.8m
XLM XLMedia	16.5x	30.7%	UK£77.3m
BOOM Audioboom Group	25.1x	-40.5%	UK£145.8m
AUTO Auto Trader Group	20.9x	5.0%	UK£5.1b

Forward PE

Price-To-Earnings vs Peers: AUTO is good value based on its Price-To-Earnings Ratio (20.9x) compared to the peer average (21.3x).

Price to Earnings Ratio vs Industry

How does AUTO's PE Ratio compare vs other companies in the European Interactive Media and Services Industry?

Price-To-Earnings vs Industry: AUTO is good value based on its Price-To-Earnings Ratio (20.9x) compared to the UK Interactive Media and Services industry average (25.1x)

Price to Earnings Ratio vs Fair Ratio

What is AUTO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

AUTO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	20.9x
Fair PE Ratio	23.8x

Price-To-Earnings vs Fair Ratio: AUTO is good value based on its Price-To-Earnings Ratio (20.9x) compared to the estimated Fair Price-To-Earnings Ratio (23.8x).

Share Price vs Fair Value

What is the Fair Price of AUTO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: AUTO (£5.42) is trading below our estimate of fair value (£5.69)

Significantly Below Fair Value: AUTO is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: AUTO is poor value based on its PEG Ratio (4.2x)

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Future Growth

How is Auto Trader Group forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

5.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: AUTO's forecast earnings growth (5% per year) is above the savings rate (0.9%).

Earnings vs Market: AUTO's earnings (5% per year) are forecast to grow slower than the UK market (10.9% per year).

High Growth Earnings: AUTO's earnings are forecast to grow, but not significantly.

Revenue vs Market: AUTO's revenue (8.5% per year) is forecast to grow faster than the UK market (4.1% per year).

High Growth Revenue: AUTO's revenue (8.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: AUTO's Return on Equity is forecast to be very high in 3 years time (50.8%).

Discover growth companies

Past Performance

How has Auto Trader Group performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

3.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: AUTO has high quality earnings.

Growing Profit Margin: AUTO's current net profit margins (56.6%) are higher than last year (48.6%).

Past Earnings Growth Analysis

Earnings Trend: AUTO's earnings have grown by 3.3% per year over the past 5 years.

Accelerating Growth: AUTO's earnings growth over the past year (91.5%) exceeds its 5-year average (3.3% per year).

Earnings vs Industry: AUTO earnings growth over the past year (91.5%) exceeded the Interactive Media and Services industry 66.8%.

Return on Equity

High ROE: AUTO's Return on Equity (51.8%) is considered outstanding.

Discover strong past performing companies

Financial Health

How is Auto Trader Group's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: AUTO's short term assets (£117.8M) exceed its short term liabilities (£53.7M).

Long Term Liabilities: AUTO's short term assets (£117.8M) exceed its long term liabilities (£16.7M).

Debt to Equity History and Analysis

Debt Level: AUTO is debt free.

Reducing Debt: AUTO currently has no debt however we can't compare to 5 years ago as we have no data for that period.

Debt Coverage: AUTO has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: AUTO has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Auto Trader Group current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.51%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: AUTO's dividend (1.51%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.89%).

High Dividend: AUTO's dividend (1.51%) is low compared to the top 25% of dividend payers in the UK market (5.29%).

Stability and Growth of Payments

Stable Dividend: AUTO has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: AUTO's dividend payments have increased, but the company has only paid a dividend for 7 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (32%), AUTO's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (28.7%), AUTO's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.2yrs

Average management tenure

CEO

Nathan Coe

2.33yrs

Tenure

UK£1,727,000

Compensation

Mr. Nathan Coe has been the Chief Executive Officer of Auto Trader Group PLC since March 1, 2020. Mr. Coe served as the Chief Financial Officer of Auto Trader Group plc from July 2017 to March 1, 2020 and...

CEO Compensation Analysis

Compensation vs Market: Nathan's total compensation ($USD2.08M) is below average for companies of similar size in the UK market ($USD3.16M).

Compensation vs Earnings: Nathan's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: AUTO's management team is considered experienced (3.2 years average tenure).

Board Members

Experienced Board: AUTO's board of directors are considered experienced (5.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/03 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31