Auto1 Group shares spike on better-than-anticipated fourth-quarter earnings

Investing.com - Auto1 Group (F:AG1G) shares touched their highest level since 2022 on Wednesday after the German digital used-car retailer posted better-than-expected fourth-quarter core earnings.

Despite signs of sluggishness in the broader European economy, particularly in traditional powerhouse Germany, the company is "executing well," analsyts at RBC Capital Markets said in a note to clients.

"Considering Auto1 Group's position and the large opportunity ahead, the shares are attractively valued," the analysts wrote.

The group's merchant and retail-customer divisions both reported higher-than-anticipated unit growth in the fourth quarter, driving revenue for the period up by 28.4% to 1.32 billion euros. Analysts had projected an uptick of 16%.

Meanwhile, adjusted earnings before interest, taxes, depreciation and amortization of 37 million euros beat expectations of 12 million euros. Gross profit margin came in at 11.8%, above consensus estimates of 11.4%.

For its 2025 fiscal year, the group guided for unit sales of 735,000 to 795,000, compared with estimates of 745,000. Adjusted core income is seen at 135 million euros to 165 million euros, higher than expectations of 132 million euros.

“Last year was a landmark year for AUTO1 Group, delivering record-breaking performance across all key financial metrics. These results were driven by the strong execution of our teams and demonstrate the operating leverage of our unique business model. 2024 marks an important first step towards our long term profitability targets,” said Auto1 CFO Markus Boser in a statement.

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