Cango (CANG) AI Stock Analysis

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Cango

(NYSE:CANG)

Rating:55Neutral

Price Target:

$4.50

▲(1.12%Upside)

Cango's score is primarily driven by its mixed financial performance, characterized by profitability improvements but revenue and cash flow volatility. Technical analysis suggests limited momentum, while valuation metrics are weak due to negative earnings. The earnings call provides balanced sentiment with growth in Bitcoin mining but highlights operational challenges.

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

Market Cap

$460.80M

Dividend YieldN/A

Average Volume (3M)431.69K

Price to Earnings (P/E)6.6

Beta (1Y)0.38

Revenue Growth40.31%

EPS Growth-204.86%

CountryUS

Employees217

SectorConsumer Cyclical

Sector Strength57

IndustryAuto - Dealerships

Share Statistics

EPS (TTM)-0.28

Shares Outstanding67,298,775

10 Day Avg. Volume420,569

30 Day Avg. Volume431,688

Financial Highlights & Ratios

PEG Ratio>-0.01

Price to Book (P/B)0.57

Price to Sales (P/S)0.00

P/FCF Ratio-4.32

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. operates an automotive transaction service platform that connects dealers, original equipment manufacturer, financial institutions, car buyers, and other industry participants in the People's Republic of China. The company offers automobile trading solutions, including car sourcing, logistics, and warehousing support for dealers; and facilitation of car purchases for car buyers. It also facilitates automotive financing services that include facilitating financing transactions from financial institutions to car buyers; and after-market services to car buyers, which includes facilitating the sale of insurance policies from insurance brokers or companies. The company was founded in 2010 and is headquartered in Shanghai, the People's Republic of China.

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 Earnings Call Summary

Earnings Call Date:May 14, 2025

(Q1-2025)

% Change Since: 1.14%|

Next Earnings Date:Sep 01, 2025

Earnings Call Sentiment Neutral

Cango's earnings call highlights significant revenue growth primarily driven by its Bitcoin mining operations. The company maintains a strong cash position and has improved loan quality, while also expanding its AutoCango platform. However, there are notable challenges, including operating and net losses, high mining costs, decreased Bitcoin mining output in April, and high electricity costs. The sentiment is balanced with opportunities in the Bitcoin mining sector and strategic efforts to address challenges.

Q1-2025 Updates

Positive Updates

Significant Revenue Increase

Total revenue for Q1 2025 was RMB 1.1 billion, a substantial increase from RMB 64.4 million in the same period of 2024, primarily driven by the Bitcoin mining business.

Bitcoin Mining Expansion

Cango mined 1,541 Bitcoin in Q1 2025 and expects to increase its hash rate capacity to 50 exahashes per second by July 31, 2025.

Strong Cash Position

As of March 31, 2025, Cango held cash and cash equivalents of RMB 2.5 billion, providing solid support for future business expansion.

Improved Loan Quality

Cango reduced its total outstanding loan balance to RMB 2.6 billion, with improved M1+ and M3+ ratios of 2.86% and 1.59%, respectively.

Expansion of AutoCango Platform

The AutoCango platform attracted over 2.37 million visits with more than 290,000 registered users and 480,000 used car listings.

Negative Updates

Operating and Net Losses

Cango reported an operating loss of RMB 155.5 million and a net loss of RMB 207.3 million in Q1 2025, primarily due to a decline in Bitcoin prices.

High Cost of Bitcoin Mining

The average cost to mine Bitcoin, excluding depreciation, was USD 70,602.1 per coin, contributing to increased operational expenses.

Decrease in Bitcoin Mining in April

Cango mined 470 coins in April, an 11.3% decrease compared to March, due to increased global network hash rate and mining difficulty.

High Electricity Costs

Cango faced high electricity costs due to the premium associated with power procurement under the hosted operation model.

Company Guidance

During Cango Inc.'s first quarter 2025 earnings call, the company provided detailed guidance on its financial and operational performance. Cango reported total revenue of USD 145 million, with USD 144 million stemming from Bitcoin mining operations, resulting in a gross profit of USD 13.61 million. Despite an operating loss of USD 21.42 million due to a decline in Bitcoin prices, the company maintained a strong cash position with USD 347 million in cash, cash equivalents, and short-term investments. The company's Bitcoin mining business achieved a total computing power of 32 exahashes per second, accounting for approximately 4% of the global average hash rate in Q1, while mining a total of 1,541 Bitcoin. Cango plans to expand its hash rate capacity to 50 exahashes per second by July 2025. Additionally, the company reported an M1+ ratio of 2.86% and an M3+ ratio of 1.59%, reflecting improvements in loan quality. Cango remains committed to its "Mine and Hold" strategy, focusing on both self-mining and long-term Bitcoin holding, while also pursuing M&A opportunities to further scale operations.

Cango Financial Statement Overview

Summary

Cango demonstrates improved profitability and operational efficiency with an impressive gross profit margin and low leverage. However, revenue volatility and cash flow inconsistencies highlight potential liquidity risks and the need for improved cash management.

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
-1.24B	1.02B	-572.01M	-423.31M	-626.97M
	Operating Cash Flow
-310.20M	1.03B	-567.39M	-404.39M	-621.61M
	Investing Cash Flow
-1.25B	2.12B	1.96B	2.66B	-493.56M
	Financing Cash Flow
-127.38M	-1.19B	-2.99B	-1.95B	-380.82M

Cango Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price4.45

Price Trends

50DMA

4.37

Positive

100DMA

4.21

Positive

200DMA

3.75

Positive

Market Momentum

MACD

0.06

Positive

RSI

43.32

Neutral

STOCH

5.52

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CANG, the sentiment is Neutral. The current price of 4.45 is below the 20-day moving average (MA) of 4.82, above the 50-day MA of 4.37, and above the 200-day MA of 3.75, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 43.32 is Neutral, neither overbought nor oversold. The STOCH value of 5.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CARS	77 Outperform	$703.70M	16.65	9.35%	―	2.24%	-57.33%
CRMT	67 Neutral	$403.84M	24.47	3.45%	―	-2.26%	―
Sector *	62 Neutral	$6.76B	11.06	2.80%	6.66%	2.68%	-24.89%
CANG	55 Neutral	$460.80M	6.63	0.12%	―	40.31%	-204.86%
SDA	42 Neutral	$266.87M	―	-167.38%	―	―	―
UXIN	40 Underperform	$789.63M	―	260.24%	―	9.33%	50.69%
KXIN	38 Underperform	$9.27M	―	-86.66%	―	―	-447.71%

* Consumer Cyclical Sector Average

Performance Comparison

CANG

Cango

4.45

2.83

174.69%

CRMT

America's Car-Mart

51.30

-9.40

-15.49%

CARS

Cars

11.19

-8.32

-42.64%

KXIN

Kaixin Auto Holdings

0.85

-8.13

-90.53%

UXIN

Uxin

3.92

1.85

89.37%

SDA

SunCar Technology Group

2.60

-6.12

-70.18%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.