Up 15% in a month, the Carsales.com (ASX:CAR) share price hits record high

Carsales shares have spent another big day in the green today.

| More on:
A smiling woman with a cute dog flings her arm out of the window of a car

Image source: Getty Image

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Carsales.com Ltd (ASX: CAR) share price has jumped into the green again on Monday, reaching a new record high at $25.98.

It's been a great few weeks for shares in the online automotive company, with the Carsales share price up almost 16% in the past month. In contrast, the S&P/ASX 200 index (ASX: XJO) has slipped 0.08% lower over the same period.

What are the tailwinds behind Carsales shares?

The Carsales share price has been on the move since the company reported its FY21 earnings in mid August.

In its report, Carsales recognised a 4% year on year increase in revenue, whereas earnings before interest, tax, depreciation and amortisation (EBITDA) grew 20% to $241 million.

This led to a net profit after tax (NPAT) of $131 million, a 9% increase from the year prior.

In addition, Carsales gave its dividend a 10% haircut from FY20, setting a final dividend payment of 22.5 cents per share.

Carsales dividend history 2010 – 2021

Source: The Motley Fool

Despite the dividend cut, Carsales' shares have shown strengths on the chart, as investors look towards the company's earnings growth instead.

The Carsales share price immediately shot up from $22.72 to $25.60 in the week following its FY21 earnings release, and has gained more than 14% from this event to date.

Carsales also completed the 49% acquisition of Trader Interactive in an announcement on 1 September.

Trader Interactive is a digital marketing corporation and a "provider of online market places and digital marketing products".

Carsales advised that the acquisition was financed through a successful $600 million fully underwritten pro-rata accelerated renounceable entitlement offer and an "upsize" of the company's existing debt facilities.

Given there has been no other market sensitive information for the company over the last month, it appears that investors are buying Carsales shares on the back of this momentum.

Carsales share price snapshot

The Carsales share price has climbed 31.3% into the green since January 1 and has gained 29.6% over the previous 12 months.

Both of these results have outpaced the S&P/ASX 200 index (ASX: XJO)'s return of around 25% over the past year.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended carsales.com Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on 52-Week Highs

A beautiful ocean vista is shown with a woman whose back is to the camera holding her arms up in triumph as she stands at the top of a rock feeling thrilled that ASX 200 shares are reaching multi-year high prices today
52-Week Highs

8 ASX 200 stocks striking multi-year highs today

These shares hit new price milestones amid a day in the green for the ASX 200.

Read more »

Five businessmen in suits walking up stairs in neat succession.
52-Week Highs

5 ASX 200 shares smashing new 52-week highs today

These five ASX 200 shares just broke into new multi-year and all-time highs. Here’s why.

Read more »

A mother and her young son are lying on the floor of their lounge sharing a tech device.
Technology Shares

Life360 shares are up more than 1,300% in 5 years. How does it compare to other apps?

Can Life360 compete with the likes of Facebook and Instagram?

Read more »

Emotional euphoric young woman giving high five to male partner, celebrating family achievement, getting bank loan approval, or financial or investing success.
52-Week Highs

5 ASX 200 shares hitting multi-year highs after strongly rebounding from tariff turmoil

These stocks have hit new price milestones amid a day in the green for the ASX 200.

Read more »

Woman laying with $100 notes around her, symbolising dividends.
52-Week Highs

Which ASX All Ords stock recently became a 10-bagger in 5 years?

Landing a 10-bagger is every investor's dream.

Read more »

Five happy friends enjoying a party.
52-Week Highs

5 ASX 200 shares smashing new 52-week highs today

The Trump tariff relief rally has helped send these five ASX 200 shares to new 52-week highs.

Read more »

Arrows pointing upwards with a man pointing his finger at one.
52-Week Highs

3 ASX All Ords shares at new 52-week highs this Friday

These shares are proving to be a safe harbour this Friday.

Read more »

An excited man stretches his arms out above his head as he reaches a mountain peak representing two ASX 200 shares reaching multi-year high prices today
52-Week Highs

These 4 ASX 200 shares just clocked new 52-week highs today

These shares are standing out from the crowd today.

Read more »