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Investing.com -- Auto1 Group SE (F:AG1G) shares dropped 5% on Wednesday, despite the German online car platform reporting better-than-expected second-quarter results and raising its full-year guidance.
The decline came as investors appeared cautious, even as the company posted a 7% beat on total units sold and lifted forecasts for gross profit and adjusted EBITDA.
In the three months ended June, Auto1 sold 200,500 vehicles, surpassing consensus expectations of 187,300 units.
This included 176,700 Merchant units and 23,800 Autohero (Retail) units, which exceeded forecasts by 6.6% and 10.3%, respectively.
Revenue reached €1.97 billion for the quarter, 9.2% above the expected €1.80 billion.
Gross profit totaled €231.2 million, also above consensus estimates of €217.2 million.
Adjusted EBITDA came in at €42.3 million, a 15.3% beat from the €36.7 million forecast, while the EBITDA margin slightly improved to 2.1%.
The company raised its full-year 2025 guidance across all key operating metrics. It now expects group unit sales between 772,000 and 817,000, up from the previous range of 735,000 to 795,000.
Merchant units are forecast between 680,000 and 720,000, and Autohero units are seen in the range of 92,000 to 97,000. Previous guidance for those segments was 650,000-700,000 and 85,000-95,000, respectively.
Auto1 also raised its gross profit guidance to €890 million-€940 million, up from €800 million-€875 million.
Adjusted EBITDA is now projected at €160 million-€190 million, compared with the prior range of €150 million-€180 million.
Consensus estimates for gross profit and adjusted EBITDA stood at €896 million and €181 million, respectively.
No new guidance was provided for revenue, with analysts continuing to project €7.4 billion in full-year sales.
The company’s performance in the quarter accounted for increased marketing and staffing investments, RBC said, suggesting the operating efficiency gains were achieved even as spending rose.
Despite the strong financial results, the market reaction suggests concerns may persist about the company’s valuation or the sustainability of its growth.
The company’s ability to deliver consistent growth in a challenging environment has been a focal point for analysts.
However, broader economic factors, such as macro uncertainty and pressure on consumer spending, continue to pose risks for online car retailers.
Auto1 also faces competition in the digital auto sales market, which could weigh on margin expansion.
“We believe AUTO1 is executing well in a difficult and uncertain environment. Considering AG1’s position and the large opportunity ahead, the shares are attractively valued,” RBC said.