CarSales.com Limited (CAR) is an Australian-based online automotive classifieds business.
As of the last close, CarSales.com’s market capitalisation stood at $7.927 AUD billion with a share price of $22.69 AUD. For the 12 months to the end of June 2022, the company reported a revenue of $509 million AUD.
The trailing twelve-month (TTM) revenue of $599 million is an impressive annualised growth of 20%. It was helped in no small part by the relaxing of COVID restrictions and record-low unemployment.
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TTM revenue of $599 AUD million and net income before exceptional items of $157 AUD million equates to a respectable net operating margin of over 26%, up from 20% in 2019, suggestive of a well-run and constantly improving operation.
The company’s beta is 0.96, which indicates that its stock is less volatile than the overall market. CarSales.com has a TTM PE ratio of 15.13, lower than the industry average. With that present revenue growth of over 20% and a healthy operating margin, a PE ratio of 15.13 offers excellent value.
The company has a forward dividend yield of 2.36%, a decent disbursement to investors of nearly all the prior year profits at the current market capitalisation.
Overall, CarSales.com has been performing reasonably well, with a steady revenue stream and a healthy net income. The company’s relatively low PE ratio, given the current growth plus a decent dividend, makes it an attractive option for investors.
Source: Yahoo! Finance
Corporate Travel Management ASX: CTD (CTD)
Corporate Travel Management ASX:CTD (CTD) is an Australian company that specialises in providing travel management services to corporate clients. With a market capitalisation of $2.616 billion and a last close price of $17.88 per share, CTD is a significant player in the Australian travel industry.
Despite the COVID-19 pandemic’s adverse impact on the travel industry, CTD has managed to maintain stable financial performance. The company reported a TTM revenue of $507.6 million, with revenue for the 12 months to the end of June 2022 at $375.3 million. Furthermore, CTD reported a TTM net income of $27.7 million, with revenue for the 12 months to the end of June 2022 at $3.1 million.
CTD has a high beta of 1.78, indicating that the stock price is relatively more volatile than the overall market. The TTM PE ratio of 94.11 suggests that the stock is relatively expensive, while it is worth keeping in mind that the COVID-19 pandemic has severely impacted the travel industry. It negatively affected the company’s earnings, and the current stock price makes this stock an expensive proposition.
TTM revenues have only just returned to pre-pandemic levels without having to add any debt. The 20% net operating margin is now in its sights though presently only 5.4%.
An operating margin of 5.4% and a market capitalisation of $2.6 AUD billion requires massive growth in top-line revenue before this stock becomes a value proposition. With the post-pandemic hype in travel over and a return to the historical mean of growth on the horizon, the hurdles to making this stock a worthwhile investment at this price are too high.
A small 0.63% dividend suggests that the company is committed to returning value to its shareholders though there are better yields for investors out there.
In conclusion, CTD is a significant player in the Australian travel industry, and despite the COVID-19 pandemic’s adverse impact, the company has maintained a stable financial performance. A solid company but definitely a wait-and-see given the current high price.
Source: Yahoo! Finance