According to Jimmy Moyaha, founder of investment firm Lebowa Capital, WeBuyCars’ R18.75 per share price is reasonable considering the company’s strong business case. “R18,75 may be a little undervalued based on the book-build value they had identified. However, playing it safe only means more upside if you’ve got it right,” Moyaha told TechCabal.
Furthermore, Moyaha stated that the share price has the potential to reach highs of as much as R25 per share in the future. WeBuyCars, on the other hand, stated that it is investing in its proprietary AI, data, and analytics to boost its e-commerce sales. Currently, e-commerce sales represent 22% of total sales, down from the 27% recorded in 2022, showing that a lot of work is yet to be done to attract e-commerce customers to the platform.
However, other analysts are a bit sceptical about the company’s fortunes on the public markets, pointing to the company’s financial performance as a put-off factor. Transaction Capital’s latest financial results show that although the volume of cars bought and sold by WeBuyCars increased by 9% and 13% respectively, its earnings were down by as much as 14% from the previous year. The company’s cost-to-income ratio also increased from 57% in 2022 to 66% in 2023.