AUTO1 increases profits and improves earnings outlook - what this means for investors

AUTO1 increases profits and improves earnings outlook - what this means for investors

After a surprising profit in daily business in the third quarter, the online used car dealer AUTO1 has once again improved its earnings outlook. In the July-September period, the company posted a small profit before interest, taxes, depreciation and special items, leading to an improvement in its earnings outlook. This led to an increase in the shares listed in the SDAX by 1.91 percent to 6.50 euros.

Analysts Marcus Diebel of JPMorgan and Wassachon Udomsilpa of RBC commented on the strong profitability trends and noted that the company is performing well in a tougher market environment. This is expected to increase market estimates.

According to the company's latest information, adjusted operating loss (Ebitda) this year is expected to be in the range of 39 to 49 million euros, an improvement from the previously expected 50 to 70 million euros loss. This positive development has laid the foundation for AUTO1 for long-term profitable growth.

Although AUTO1 recorded a decline in sales of 140,630 cars in the third quarter, a decline of 14 percent compared to the previous year, the company was able to increase gross profit per car. In addition, AUTO1 has invested in the brand awareness of its private customer brands Autohero and wirkaufendeinauto.de and has been able to record a reduction in marketing costs for some time. The first phase of the Europe-wide development of workshops for the in-house processing of used cars has also been completed.

UBS has left the rating for AUTO1 at “Buy” and set a price target of 15 euros. Analyst Adam Berlin commented on the very positive progress at AUTO1 and noted that the company is ahead of plan in achieving break-even in operating profit.

According to a report by www.finanzen.net,