Like so many other ASX tech shares, CAR Group Ltd (ASX: CAR) has had a rough run. The ASX tech share is down 24% year to date and has plunged 36% over the past six months.
That's a sharp reversal for a company that delivered strong results, yet still got caught in the broader tech sell-off.
After trading around $40 in August 2025, the share price has steadily slid to $23.36 at the time of writing.
So, what's going on and could this be an opportunity?
Let's break it down.
A dominant market position
CAR Group isn't just another tech stock. It operates leading online automotive marketplaces across multiple regions, including Australia and key international markets.
These platforms benefit from powerful network effects. Buyers go where the listings are. Sellers go where the buyers are. That creates a self-reinforcing cycle and a strong competitive moat.
Once established, these marketplaces are incredibly hard to displace.
Attractive margins
This is also a high-margin business.
Digital marketplaces don't carry the same heavy costs as traditional businesses. Once the platform is built, additional users and listings come at relatively low incremental cost.
That scalability helps drive strong margins and consistent cash generation, exactly what long-term investors want to see in an ASX tech share.
A long runway for growth
Perhaps the biggest drawcard for the ASX tech share is the growth runway. Globally, automotive sales are still shifting online. In many regions, penetration remains relatively low, giving CAR Group plenty of room to expand.
As more dealers and private sellers move online — and as digital advertising becomes the norm — the company stands to benefit.
In other words, this isn't just a mature business. It's still growing into its opportunity.
So why the sell-off?
The recent decline looks less about fundamentals and more about sentiment.
Tech stocks broadly have been under pressure, with investors rotating away from growth and reassessing valuations. CAR Group has been caught in that downdraft, despite continuing to execute.
Of course, this ASX tech share is not risk-free.
Competition remains a factor, particularly in global markets where local players can be strong. Economic slowdowns could also impact vehicle sales volumes, which in turn affects listings and advertising demand.
And like all tech stocks, CAR Group is sensitive to shifts in market sentiment and interest rates.
What next for the ASX tech share?
Morgan Stanley reiterated its buy rating last week, although it trimmed its 12-month price target from $38 to $32.
Across the broader market, sentiment remains firmly positive. According to TradingView data, 14 out of 16 analysts rate the stock as a buy or strong buy.
The average price target sits at $34.90, implying upside of nearly 50% from current levels.
Foolish Takeaway
CAR Group's share price has taken a hit. But the business itself still looks strong.
With a dominant position, attractive margins, and a long growth runway, this ASX tech share could be one to watch, especially while sentiment remains weak.
Because if confidence returns, this could be a very different story a year from now.
The post Here's why this $9 billion ASX tech share could be a buy right now appeared first on The Motley Fool Australia.
Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended CAR Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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