S&P/ASX 200 Index (ASX: XJO) share CAR Group Ltd (ASX: CAR) is slipping today.
Shares in the auto listings company closed yesterday trading for $24.21. In morning trade on Tuesday, shares are swapping hands for $24.04 apiece, down 0.4%, giving the company a market cap of some $9.1 billion.
For some context, the ASX 200 is up 0.4% at this same time.
It was only back on 18 August that CAR Group shares closed at an all-time high of $41.62.
Since then, the ASX 200 share has plunged 42.2%. Longer term, shares are down 27.8% over 12 months. Losses that will only be partially eased by the two partly franked dividends, totalling 84 cents a share, that the company paid out (or shortly will pay out) over the full year.
Car Group currently trades on a 3.5% partly franked trailing dividend yield.
A lot of the selling pressure hitting the stock in recent months has come amid the broader tech stock sell off. As you likely known, this has been fuelled by concerns that artificial intelligence, or AI, could replace a lot of the services companies like Car Group provide.
But Baker Young's Toby Grimm has a decidedly different take on the future impact of AI on this particular company's performance. And with the share price down sharply, he believes now is an opportune time to buy the stock (courtesy of The Bull).
Here's why.
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ASX 200 share tipped to rebound
"This online automotive marketplace operator posted stronger-than-expected first half results for 2026," Grimm said.
"It grew revenue by 13% and reported EBITDA [earnings before interest, taxes, depreciation and amortisation] by 11%," he noted.
The ASX 200 share closed up 9.9% on 9 February, the day it reported those H1 FY 2026 results. Atop the revenue and earnings growth, CAR Group achieved a 16% year on year increase in reported net profit after tax (NPAT) to $143 million.
As for investor concerns over the potential disruption posed by AI, Grimm said:
Recent sector-wide selling, driven largely by concerns around potential artificial intelligence (AI) disruption, has weighed on valuations. However, we believe CAR's trusted brands, established distribution network and strong dealer relationships position it well to integrate AI tools into its services rather than be disrupted by them.
Over time, AI could enhance listing quality, pricing transparency and advertising effectiveness across its platforms.
Summing up his buy recommendation on the beaten down ASX 200 share, Grimm concluded:
Given the company's strong market position, attractive margins and long runway for digital automotive marketplace growth across several geographies, we view recent price weakness as an opportunity to accumulate a high-quality technology-enabled marketplace at a more reasonable valuation.
