Carsales.com Ltd
Thesis
Carsales.com Ltd is positioned to benefit from its dominant online platform in the Australian auto market, which has strong network effects and high EBITDA margins. Despite recent economic challenges, the company's core segments are performing well, and its international marketplaces are growing rapidly. The stock is currently undervalued, with a target price of AUD $22.62 per share, representing a 75% total return opportunity.
Did it work?
The long thesis was directionally correct — Carsales shares gained +29.6% over the 50 months since the pitch, validating the claim that the stock was undervalued. However, the return fell well short of the stated 75% total return opportunity (target AUD $22.62), and even accounting for likely dividends the gap remains substantial. With more than four years elapsed, the horizon has largely run its course, so the undervaluation was only partially corrected rather than fully realized.