Cango (CANG) AI Stock Analysis

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Cango

(NYSE:CANG)

69Neutral

Cango's overall stock score reflects a mix of improved financial performance, solid valuation, and strategic growth in cryptocurrency mining. The strengths include significant margin improvements and low leverage, while risks involve revenue volatility and cash flow inconsistencies. Technical indicators suggest short-term strength, and the earnings call provides positive sentiment on strategic initiatives despite some challenges.

Cango (CANG) vs. S&P 500 (SPY)

Market Cap

$353.90M

Dividend YieldN/A

Average Volume (3M)326.93K

Price to Earnings (P/E)5.4

Beta (1Y)0.49

Revenue Growth-53.97%

EPS GrowthN/A

CountryUS

Employees217

SectorConsumer Cyclical

Sector Strength62

IndustryAuto - Dealerships

Share Statistics

EPS (TTM)0.66

Shares Outstanding67,298,775

10 Day Avg. Volume268,943

30 Day Avg. Volume326,926

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.93

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Cango Business Overview & Revenue Model

Company DescriptionCango Inc. (CANG) is a leading automotive transaction service platform in China, connecting dealers, financial institutions, and car buyers. The company operates primarily in the automotive sector, offering a suite of services that facilitate automotive transactions. These services include automotive financing facilitation, automotive trading transactions, and after-market services facilitation, enhancing the efficiency and accessibility of car purchases and related services for consumers and businesses alike.

How the Company Makes MoneyCango makes money through a diversified revenue model primarily driven by service fees from its automotive transaction services. The company generates revenue by facilitating automotive financing, where it earns commissions from financial institutions for connecting them with car buyers seeking financing options. Additionally, Cango earns transaction fees from automotive trading transactions, where it assists in the buying and selling of vehicles. The company also generates income through after-market services facilitation, offering value-added services such as insurance and maintenance, and receiving commissions from these service providers. Key partnerships with financial institutions, car dealerships, and service providers play a significant role in driving Cango's earnings, as these collaborations expand the company's network and enhance its service offerings.

Cango Financial Statement Overview

Summary

Cango demonstrates improved profitability and margins in its income statement despite revenue volatility. The balance sheet is strong with low leverage, but asset and liability fluctuations pose potential risks. Cash flow inconsistencies and challenges in converting profits to cash highlight liquidity risks. Overall, Cango shows improved financial performance but needs to address growth and stability concerns.

Income Statement

Positive

Cango's income statement indicates a volatile revenue trend with a significant drop in 2023 from 2022, followed by a recovery in 2024. The gross profit margin in 2024 is impressive at 55.30%, showing strong cost control. However, the net profit margin has swung from negative to a robust 37.24% in 2024, indicating improved profitability. EBIT and EBITDA margins have also improved significantly, highlighting enhanced operational efficiency. Despite these improvements, the revenue growth rate is concerning due to the high volatility, impacting the overall score.

Balance Sheet

Positive

The balance sheet reflects a strong equity position with a debt-to-equity ratio of 0.04 in 2024, indicating low leverage. The equity ratio is 68.45%, suggesting a solid capital structure with ample equity buffer. Return on equity has improved dramatically to 7.34% in 2024 from the previous negative figures, showing effective use of shareholder capital. Despite these strengths, the company experienced fluctuations in total assets and liabilities, which may pose potential risks.

Cash Flow

Neutral

Cango's cash flow statement shows inconsistent free cash flow, with a substantial positive free cash flow in 2023 but zero in 2024, raising concerns about sustainable cash generation. The operating cash flow to net income ratio is not calculable due to zero operating cash flow in 2024, indicating potential challenges in translating profits into cash. The historical pattern of negative operating cash flow raises further concerns about cash management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
804.49M	1.70B	1.98B	3.92B	2.05B
	Gross Profit
444.97M	190.06M	150.36M	963.71M	954.31M
	EBIT
178.89M	-73.75M	-947.14M	53.91M	429.86M
	EBITDA
182.91M	78.33M	-947.14M	35.30M	439.40M
	Net Income Common Stockholders
299.82M	-37.87M	-1.11B	-8.54M	3.37B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.52B	1.66B	2.32B	4.03B	5.77B
	Total Assets
5.97B	4.65B	7.02B	10.95B	12.15B
	Total Debt
169.54M	90.54M	1.08B	2.00B	2.56B
	Net Debt
-1.12B	-930.06M	697.84M	569.36M	1.14B
	Total Liabilities
1.88B	831.63M	2.69B	3.96B	3.77B
	Stockholders Equity
4.09B	3.82B	4.32B	6.99B	8.38B
Cash Flow		Free Cash Flow
0.00	1.02B	-572.01M	-423.31M	-626.97M
	Operating Cash Flow
0.00	1.03B	-567.39M	-404.39M	-621.61M
	Investing Cash Flow
0.00	2.12B	1.96B	2.66B	-493.56M
	Financing Cash Flow
0.00	-1.19B	-2.99B	-1.95B	-380.82M

Cango Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3.57

Price Trends

50DMA

3.97

Negative

100DMA

4.32

Negative

200DMA

3.14

Positive

Market Momentum

MACD

>-0.01

Negative

RSI

48.14

Neutral

STOCH

11.67

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CANG, the sentiment is Negative. The current price of 3.57 is below the 20-day moving average (MA) of 3.94, below the 50-day MA of 3.97, and above the 200-day MA of 3.14, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 48.14 is Neutral, neither overbought nor oversold. The STOCH value of 11.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CANG.

Cango Risk Analysis

Cango disclosed 95 risk factors in its most recent earnings report. Cango reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Cango Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CARS	73 Outperform	$724.03M	15.79	9.60%	―	4.35%	-58.76%
CANG	69 Neutral	$353.90M	5.38	7.59%	―	-53.97%	―
CRMT	60 Neutral	$392.44M	51.79	1.50%	―	-2.26%	―
Sector *	59 Neutral	$11.38B	10.18	-0.84%	4.04%	1.25%	-16.04%
SDA	44 Neutral	$285.66M	―	-167.38%	―	―	―
UXIN	40 Underperform	$637.14M	―	260.24%	―	9.33%	50.69%
KXIN	38 Underperform	$9.31M	―	-86.66%	―	-81.46%	-2552.53%

* Consumer Cyclical Sector Average

Performance Comparison

CANG

Cango

3.57

2.14

149.65%

CRMT

America's Car-Mart

45.62

-9.92

-17.86%

CARS

Cars

11.29

-4.79

-29.79%

KXIN

Kaixin Auto Holdings

0.94

-8.06

-89.56%

UXIN

Uxin

3.59

1.87

108.72%

SDA

SunCar Technology Group

2.50

-4.60

-64.79%

Cango Earnings Call Summary

Earnings Call Date: Mar 6, 2025 | % Change Since: 7.53% | Next Earnings Date: Jun 3, 2025

Earnings Call Sentiment Positive

The earnings call highlights significant revenue growth and a profitable turnaround driven by successful expansion into cryptocurrency mining and robust operational performance. However, challenges include a decline in automotive trading revenue and increased operating costs. Despite the high costs associated with Bitcoin mining, Cango maintains a strong liquidity position, supporting its strategic initiatives.

Highlights

Significant Revenue Growth

Cango recorded total net revenue of RMB670 million in Q4 2024, representing a year-on-year surge of over 400%.

Profitable Turnaround

Net income for Q4 2024 was RMB55.89 million, compared to a net loss of RMB103.8 million in the same period of 2023.

Successful Expansion into Cryptocurrency Mining

Cango acquired Bitcoin mining machines with a hash rate of 50 EH for $400 million USD, becoming the third-largest Bitcoin miner globally.

Robust Operational Performance in Crypto Mining

Cango successfully mined 933.8 Bitcoins by the end of 2024, with average operating hash rates of 93% and 95% for November and December respectively.

Strong Liquidity Position

Cash, cash equivalents, and short-term investments amounted to approximately RMB2.52 billion as of the end of 2024.

Lowlights

Decline in Automotive Trading Revenue

Revenue from automotive trading-related income in Q4 2024 was RMB15 million compared with RMB130.2 million in the same period of 2023.

Increased Operating Costs

Total operating costs and expenses in Q4 2024 were RMB645.5 million compared with RMB159.1 million in the same period of 2023, primarily due to costs associated with the new crypto mining business.

High Bitcoin Mining Costs

The average cost to mine Bitcoins, excluding depreciation of mining machines, was $67,769.9 per Bitcoin in Q4.

Company Guidance

During Cango Inc.'s fourth quarter and full year 2024 earnings call, the company provided extensive guidance on its strategic direction and financial performance. Notably, Cango's outstanding loan balance decreased significantly from over RMB40 billion to approximately RMB3.9 billion, with M1 plus and M3 plus ratios at 3.24% and 1.78%, respectively. The company reduced its credit risk exposure to RMB1.08 billion and held cash, cash equivalents, and short-term investments totaling approximately RMB2.52 billion. In a pivotal move, Cango shifted focus to the cryptocurrency sector, acquiring Bitcoin mining machines with a hash rate of 50 EH for $400 million USD, making it the third-largest Bitcoin miner globally. In November and December 2024, Cango mined 933.8 Bitcoins, contributing to a total net revenue of RMB670 million for the fourth quarter, a year-on-year increase of over 400%, and a net income of RMB55.89 million. Looking ahead, Cango plans to expand its computing power to 50 EH by the first quarter of 2025 and projects an annual production of 6,000 Bitcoins. The company aims to strengthen its position in Bitcoin mining and continue developing its automotive business, particularly in used car exports, while maintaining a focus on sustainable energy solutions.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.