The Motley Fool

Carsales share price zooms higher on coronavirus update

The Carsales.Com Ltd (ASX: CAR) share price looks set to finish the week in style.

In afternoon trade the auto listings company’s shares are up an impressive 7% to $12.52.

Why is the Carsales share price zooming higher?

Investors have been buying Carsales shares this afternoon after the release of an update in relation to the impact of COVID-19 on its business.

According to the release, the company notes that over the past few weeks there has been a steady escalation in the impact of COVID-19 in Australia.

In light of this, management believes it is no longer possible to predict the impact on the buying and selling activity on the Carsales platform in Australia.

Pleasingly, its international businesses currently remain resilient during the challenging global environment.

The company advised that its Korean business is delivering robust operational metrics which is supporting continued solid growth in revenue and earnings. It is a similar story in Brazil, with good operational metrics reinforcing continued strong growth in revenue and earnings.

However, due to the importance of its Australian operations and the uncertainty in this key market, management feels it is appropriate to withdraw its guidance.

That guidance, which was issued with its half year results, was for solid growth in group revenue, adjusted EBITDA, and adjusted NPAT in FY 2020.

Management commentary.

Carsales CEO, Cameron McIntyre, commented: “With the continuing spread of COVID-19, our overriding priority is the safety and wellbeing of our employees and customers in these difficult times. We have a strong plan in place to reduce exposure to our employees and we have strong business continuity measures in place.”

“As a business, we had good momentum prior to the impact of COVID-19 and we are confident in the underlying performance and resilience of our business model. We have a strong balance sheet and prudent gearing, which positions us well to deal with this challenging environment,” he concluded.

NEW. The Motley Fool AU Releases Five Cheap and Good Stocks to Buy for 2020 and beyond!….

Our experts here at The Motley Fool Australia have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading over 40% off it's high, all while offering a fully franked dividend yield over 3%...

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click here or the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended carsales.com Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.