Our 12-month target price for ASG is $1.75 per share, which is based on the weighted average of our blended valuation of:

1. DCF valuation of $2.35 per share (25% weighting);
2. PE relative valuation of $1.55 per share (75%).

Our 10-year DCF valuation is derived using a beta of 1.3 and a WACC of 12.3%. We use a risk-free rate of 4.0% and a terminal growth rate of 2.0%.

Our PE relative valuation uses our FY26e EPS forecasts and applies a ~9x PE multiple, representing a ~30% discount to domestic peers reflecting ASG’s market share and concentration in the luxury segment.

We see the following risks to our valuation: i) A significant economic downturn impacting new car sales; ii) A shift by OEMs towards agency and direct to consumer models; iii) Restrictions on dealership expansion from OEMs; iv) Increased competition impacting margins.

If the impact on the company from any of these factors proves to be greater than we anticipate, the stock will likely have difficulty achieving our financial and price targets. Conversely, if any of these factors proves to have less of an effect than we anticipate, the stock could outperform our target.