Autohome slips 7.5% as Morgan Stanley hits sidelines over hotter competition

Autohome is on the slide today, down 7.5%, after a downgrade to Equal Weight at Morgan Stanley, which sees the online auto platform as facing hotter competition.

“We expect low-single-digit percentage revenue growth of ATHM’s core business mainly due to increasing competition from its major competitors like Dongchedi and Bitauto,” analyst Eddy Wang writes.

He’s expecting non-GAAP net margin to drop 3.6 percentage points, to 34.5% in the second quarter, “mainly dragged by loss-making TTP Car as well as operating deleverage.”

He also notes that top management departures over the past couple of months will bring more uncertainty to the long-term strategy.

To reflect the lower forecasts for revenue growth and margins, the firm is trimming earnings forecasts by 12% for 2022, and by 19% for 2023.

And it’s slashed its price target to $50 from $106; that now implies 5% further downside.

Author: Jason Aycock, Seeking Alpha

You might also like