DAVY VIEW

Cazoo Group’s (CZOO) tried and tested management team addresses the material, and as yet underpenetrated, online used car market. Based on the business model of US leader Carvana (CVNA), CZOO has made rapid early progress in the UK. It has a hyper-growth revenue profile and a hyper-valuation to go with it. We forecast 20/23 revenue CAGR hitting +191%; our price target levers a 2.26x CY22 revenue multiple. We find it a compelling, but high risk, opportunity. We initiate coverage with a ‘Neutral’ rating and a price target of US$8.60.