Intrinsic Value Aramis Group SAS (ARAMI.PA)

• Previous Close: €4.61
• Intrinsic Value: €47.67
• Upside potential: +934%

Stock Valuation Context

Business Model And Market Position

Aramis Group SAS is a leading European online used car retailer, operating under brands such as Aramisauto, Cardoen, Clicars, and CarSupermarket across France, Belgium, Spain, and the UK. The company leverages a digital-first approach to streamline the used car buying process, offering a broad inventory, transparent pricing, and value-added services like financing and warranties. This model capitalizes on the growing consumer preference for online automotive transactions, reducing overhead costs associated with traditional dealerships. Aramis Group differentiates itself through a vertically integrated supply chain, sourcing vehicles directly from individuals, leasing companies, and corporate fleets, which ensures quality control and competitive pricing. The company operates in the highly fragmented European used car market, where it competes with both traditional dealerships and emerging digital platforms. Its multi-brand strategy allows it to cater to diverse regional preferences while maintaining operational synergies. With a strong foothold in key Western European markets, Aramis Group is well-positioned to benefit from long-term trends favoring online used car sales, though it faces challenges from macroeconomic volatility and competitive pressures.

Revenue Profitability And Efficiency

Aramis Group reported revenue of €2.24 billion for the fiscal year ending September 2024, reflecting its scale in the online used car market. Net income stood at €5.01 million, indicating modest profitability amid competitive and operational challenges. The company generated €54.02 million in operating cash flow, demonstrating its ability to convert sales into cash, though capital expenditures of €13.71 million suggest ongoing investments in platform and logistics infrastructure.

Earnings Power And Capital Efficiency

The company’s diluted EPS of €0.0607 highlights its earnings power relative to its share count. Aramis Group’s capital efficiency is underscored by its ability to maintain positive operating cash flow while navigating the capital-intensive nature of the used car market. However, its net income margin remains thin, reflecting pricing pressures and operational costs inherent in the industry.

Balance Sheet And Financial Health

Aramis Group holds €37.01 million in cash and equivalents, providing liquidity to manage short-term obligations. Total debt of €215.32 million indicates leverage, though the company’s operating cash flow suggests it can service this debt. The balance sheet reflects a typical structure for a growth-oriented online retailer, with working capital tied to inventory and receivables.

Growth Trends And Dividend Policy

The company’s growth is tied to the expansion of its online platform and geographic reach, though macroeconomic headwinds may temper near-term performance. Aramis Group does not currently pay dividends, reinvesting cash flow into growth initiatives and market penetration. Its ability to scale profitably will be critical to sustaining long-term growth in a competitive sector.

Valuation And Market Expectations

With a market capitalization of approximately €641 million, Aramis Group trades at a moderate valuation relative to its revenue. The low beta of 0.37 suggests lower volatility compared to the broader market, reflecting investor perception of its resilience. Market expectations likely hinge on the company’s ability to improve margins and gain market share in a fragmented industry.

Strategic Advantages And Outlook

Aramis Group’s strategic advantages include its digital platform, multi-brand presence, and integrated supply chain, which position it well for long-term growth in the online used car market. However, the outlook depends on execution amid economic uncertainty and competitive dynamics. Success will require balancing growth investments with profitability, while leveraging technology to enhance customer experience and operational efficiency.

Sources

Company filings, market data