Autohome stock target raised to $34 at Jefferies following earnings

Published 20/02/2025, 23:15
Updated 20/02/2025, 23:16
Autohome stock target raised to $34 at Jefferies following earnings

On Thursday, Autohome Inc. (NYSE: ATHM) received a revised price target from Jefferies, with the new target set at $34.00, up from the previous $33.90. The firm has kept a Buy rating on the shares, following the company’s fourth-quarter results. Autohome’s revenue matched expectations, while its adjusted earnings surpassed forecasts, supported by an impressive gross profit margin of 81.5%. According to InvestingPro data, the company maintains strong financial health with a "GREAT" overall score, suggesting robust operational efficiency. The company’s media service revenue experienced a boost, which was slightly tempered by a weaker performance in leads generation revenue.

The change in Autohome’s controlling shareholder to Haier is anticipated to create synergies, particularly in the used car segment. Additionally, collaborations with Ping An are expected to span various areas. The company’s strong financial position, with more cash than debt and a current ratio of 7.34, provides a solid foundation for these strategic initiatives. Analysts at Jefferies predict that the media service sector will see a reduced year-over-year decline in the first quarter, while leads generation is projected to be in line with industry growth. InvestingPro analysis suggests the stock is currently undervalued, with 8 additional key insights available to subscribers.

The analysts also highlighted Autohome’s effective cost control measures. In their commentary, they noted, "ATHM reported 4Q results with revenue came in line and adjusted earnings beat expectations. Media service revenue beat offset by softer performance in leads generation revenue. Change in controlling shareholder to Haier generates synergies in used cars and co-operations with Ping An cover a number of areas. We expect media service to narrow down YoY decline in 1Q while leads generation to align with industry growth. Solid cost control is expected. Maintain Buy."

Autohome’s stock performance will continue to be monitored by investors, as the company adapts to changes in ownership and expands its collaboration efforts. The updated price target reflects Jefferies’ confidence in the company’s strategic direction and its ability to manage costs effectively.

In other recent news, Autohome Inc. reported fourth-quarter earnings that exceeded analyst expectations, causing a notable increase in its stock. The company achieved adjusted earnings per share of RMB4.21 ($0.58), surpassing the consensus estimate of RMB3.43. However, revenue fell short of forecasts, reaching RMB1.78 billion ($244.3 million) compared to the anticipated RMB1.87 billion. Despite the revenue miss, the company’s net income attributable to shareholders declined to RMB320.5 million ($43.9 million) from RMB446.7 million in the same period last year. The online marketplace and others revenues saw a year-over-year growth of 3.3% to RMB588.2 million ($80.6 million) in the fourth quarter. For the full year 2024, Autohome reported a net income attributable to shareholders of RMB1.68 billion ($230.3 million) on revenue of RMB7.04 billion ($964.4 million). CEO Song Yang highlighted the company’s focus on integrating its online-to-offline ecosystem and achieving significant milestones in user growth and new retail business expansion. Investors are keenly observing whether Autohome can sustain its momentum and return to top-line growth in 2025.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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