Shares in online classifieds giant Carsales.com Ltd (ASX: CAR) are rangebound today and are now trading 0.4% lower at $25.21.
It's been a volatile 3 months for Carsales shareholders, with prices closing as high as $26.44 and trading as low as $24.15 in that time.
Over a longer time frame, Carsales has been trading sideways since late August after scoring relatively healthy gains mid-year.
Fear surrounding the new Omicron COVID-19 variant hasn't been kind to shares of specialist platforms such as Carsales. With uncertainties clouding visibility moving forward, it's worth checking what the experts are saying.
So, is it a buy? Let's take a look and find out.
What's UBS saying about the Carsales share price?
UBS is bullish on the company and rates it as a buy amid the current market mechanics. The broker reckons that Carsales can grow its domestic dealer revenue by an average of 8.5% into FY26.
It says Carsales offers vendors and dealers a unique value proposition that ensures modest price increases can be maintained.
In view of the speculation surrounding inflation and price increases over the coming years, this kind of pricing power is important, UBS says.
Meanwhile, the broker also likes Carsales' recent retailing and financing initiatives, which it feels could add another 3-5% to revenue growth over the next five years.
Not only that, but UBS is also optimistic about the classifieds company's growth trajectory into South Korea. It bakes in similar projections for its revenue performance there.
With these points in mind, the broker upgraded its price target on the stock in a recent note to clients, lifting its valuation by 6% to $27 per share.
What's the sentiment on the Carsales share price?
However, UBS might be one of a few contrarians covering Carsales. From a list of analysts provided by Bloomberg Intelligence, just 25% advocate buying shares in the company right now, whereas 25% have it as a sell.
The remaining 50% have it as a hold or retain a neutral stance on the direction of the Carsales share price. Jefferies is most bullish on the outlook for investors, valuing the company at $30.08 per share.
Evans and Partners, alongside Barrenjoey Markets, also has Carsales as a buy with $30.40 and $30 price targets respectively.
However, the price targets vary more than $9 per share, indicating a 43% spread in opinion on the valuation of Carsales share price.
Even still, the consensus price target on the company is $26.37, indicating an upside potential of more than 4% at the time of writing.
Carsales share price summary
Year to date, the Carsales share price has climbed around 28%. Although it fell sharply earlier in December, it now trades up 1.41% for the month.
Over the longer term, the company's shares have outpaced the S&P/ASX 200 Index (ASX: XJO) benchmark which has gained just under 14% year to date.
