Autohome Inc. (NYSE: ATHM) is the prominent car-buying website in China. It covers the entire car purchase and ownership cycle by providing original and AI-generated material, a large automobile library, and extensive automobile listing information. Automakers and dealers benefit from ATHM's "Autohome Mall," a full-service online transaction platform. ATHM had 127.35 million American Depositary Shares (ADS) listed and outstanding (each ADS representing four Class A ordinary shares).
Why should Investors make an Exit?
Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation
(Analysis by Kalkine Group)
* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
ATHM's stock price has been volatile throughout the year and has fallen 29.7% in the past six months, and is currently leaning towards the lower end of its 52-week range of USD 20.49 to USD 102.75. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 26.00.
Considering the current trading levels, a deterioration in margins, drop-in topline and bottom-line, current valuation, and associated risks, we recommend a "Sell" rating on the stock at the closing price of USD 31.80, down 2.4% as of March 30, 2022. Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing.
1-Year Technical Price Chart (as of March 30, 2022). Source: REFINITIV, Analysis by Kalkine Group
* The reference data in this report has been partly sourced from REFINITIV.
* All forecasted figures and industry information have been taken from REFINITIV.