Latest news with #AUTO1GroupSE
Yahoo
11-04-2025
- Automotive
- Yahoo
Is AUTO1 Group SE's (ETR:AG1) 3.4% ROE Worse Than Average?
One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. We'll use ROE to examine AUTO1 Group SE (ETR:AG1), by way of a worked example. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for AUTO1 Group is: 3.4% = €21m ÷ €613m (Based on the trailing twelve months to December 2024). The 'return' is the yearly profit. So, this means that for every €1 of its shareholder's investments, the company generates a profit of €0.03. Check out our latest analysis for AUTO1 Group Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As shown in the graphic below, AUTO1 Group has a lower ROE than the average (9.4%) in the Specialty Retail industry classification. That's not what we like to see. That being said, a low ROE is not always a bad thing, especially if the company has low leverage as this still leaves room for improvement if the company were to take on more debt. A high debt company having a low ROE is a different story altogether and a risky investment in our books. You can see the 3 risks we have identified for AUTO1 Group by visiting our risks dashboard for free on our platform here. Most companies need money -- from somewhere -- to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same. AUTO1 Group clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 1.77. Its ROE is quite low, even with the use of significant debt; that's not a good result, in our opinion. Investors should think carefully about how a company might perform if it was unable to borrow so easily, because credit markets do change over time. Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. In our books, the highest quality companies have high return on equity, despite low debt. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So you might want to check this FREE visualization of analyst forecasts for the company . If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Globe and Mail
28-03-2025
- Automotive
- Globe and Mail
Analysts Are Bullish on Top Consumer Cyclical Stocks: AUTO1 Group SE (ATOGF), Tesla (TSLA)
There's a lot to be optimistic about in the Consumer Cyclical sector as 2 analysts just weighed in on AUTO1 Group SE (ATOGF – Research Report) and Tesla (TSLA – Research Report) with bullish sentiments. Light Up your Portfolio with Spark: Easily identify stocks' risks and opportunities. Discover stocks' market position with detailed competitor analyses. AUTO1 Group SE (ATOGF) J.P. Morgan analyst Marcus Diebel maintained a Buy rating on AUTO1 Group SE today and set a price target of EUR29.00. The company's shares closed last Monday at $24.45, close to its 52-week high of $25.29. According to Diebel is ranked #8776 out of 9445 analysts. Currently, the analyst consensus on AUTO1 Group SE is a Strong Buy with an average price target of $25.16, a 2.9% upside from current levels. In a report issued on March 14, Exane BNP Paribas also upgraded the stock to Buy with a EUR30.00 price target. Tesla (TSLA) RBC Capital analyst Tom Narayan maintained a Buy rating on Tesla today and set a price target of $320.00. The company's shares closed last Thursday at $273.13. According to Narayan is a 3-star analyst with an average return of 2.1% and a 41.6% success rate. Narayan covers the NA sector, focusing on stocks such as Bayerische Motoren Werke Aktiengesellschaft, Mobileye Global, Inc. Class A, and Magna International. ;'> The word on The Street in general, suggests a Hold analyst consensus rating for Tesla with a $328.24 average price target, which is a 20.5% upside from current levels. In a report issued on March 16, Mizuho Securities also maintained a Buy rating on the stock with a $430.00 price target.
