Carsales.com Changes Name to CAR Group

Following shareholder approval at its annual general meeting and registration with the Australian Securities and Investments Commission, the former Carsales.com has changed its name to CAR Group. The name change will be effective on the ASX on Friday, Nov. 3, 2023. The company’s ticker is unchanged. Our fair value estimate is unchanged at AUD 25 per share. At current prices, CAR Group shares screen as overvalued.

The name change reflects CAR Group’s increasing overseas exposure and the need to more clearly delineate the parent company from its various marketplace brands. We forecast CAR Group’s overseas businesses to constitute the majority of group revenue in fiscal 2024, from 41% in fiscal 2023, following the acquisition of an additional 40% of webmotors in Brazil, and a full-year contribution from Trader Interactive in North America.

We have been constructive on CAR Group’s overseas expansions. We believe online marketplaces for vehicles, more than real estate and employment, naturally consolidate towards a single marketplace. We see a unique supply from private sellers providing vehicle marketplaces with valuable depth of selection and we see this supply being easily transferable to different geographies, which is a key difference in market dynamics compared with real estate and employment. We believe CAR Group’s know-how around how to make its overseas marketplaces more performant, user-friendly, and feature-rich will help consolidate these markets.