Analysis
Business and Industry
What Customers Pay For
Mobility Global separated from S&P Global on July 1, 2026. CARFAX sells vehicle-history, listings and service-related products. The B2B business supplies planning, forecasting, marketing and dealer workflow tools. In 2025, CARFAX accounted for about 65% of revenue, B2B for 35%, and subscriptions for 81% of total revenue. Subscription revenue is recognized over the service period; transactional revenue is recognized when the product is delivered. [S1–S3]
The important operating questions are how many dealer locations pay, what they spend, whether they renew and whether they add products. A large collection of vehicle information and a recognizable brand can make those products useful. Neither, by itself, tells us how much it will cost to retain the customer. This research did not establish a reliable numerical history of retention by customer cohort.
Experian’s AutoCheck offers an alternative for vehicle history and automotive data. Cox Automotive competes across dealer marketing, inventory, sales and service. J.D. Power supplies vehicle specifications, valuations and data feeds. Their own materials establish overlapping offerings, not which product is more accurate or more profitable. Customer-built systems, free data and AI-enabled tools are additional substitutes. We assign no separate AI revenue premium: the same tools that improve MBGL’s efficiency can reduce competitors’ costs or weaken website referrals. [S6–S8]
Dealer consolidation can reduce the number of billable locations and give larger customers more bargaining power. Credit costs, vehicle affordability, tariffs and uncertain automaker spending can constrain customer budgets. Subscriptions may delay that pressure, but it can arrive when contracts renew. Foreign operations and data rules add further costs and uncertainty.
Evidence: Business Sources and Limits.
Investment Thesis
Useful Data Must Become Cash For Owners
The favorable case has a clear sequence. Useful data and a trusted brand help dealers make decisions; dealers renew and buy more products; revenue then grows faster than data, advertising and technology expenses. Only after the other claims on that revenue are paid does the improvement reach shareholders through retained cash, distributions or stronger earnings.
The first links have historical support. The later ones still need proof as an independent company. Management said bundling products had lengthened sales cycles and was changing its approach. Listings products and Germany offer opportunities, but this research did not establish a separate profit contribution from either that could carry the forecast. [S3–S5]
Pricing is another important distinction. First-half 2026 revenue rose from $859 million to $923 million. The filing attributes $36 million of that $64 million increase to price increases and about $20 million to new business. Pricing supports the value customers place on the products, but it does not establish equally strong growth in customer numbers or volume. Renewals will help show whether those increases last. [S3]
Within our horizon, standalone results can provide evidence about cash conversion and transition spending. The full margin improvement target extends farther out. A long-term operating ambition therefore does not supply a dependable twelve-month return mechanism. If growth takes more selling effort or transition work costs more, the business can remain useful while the reward to shareholders disappoints.
Evidence: Growth and Guidance.
Financial Quality and Funding
The Earnings Figure Is Only the Starting Point
Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization, with additional company-defined adjustments. It can help compare operating results, but it leaves out costs that matter to shareholders. In the first half of 2026, MBGL reported $386 million of adjusted EBITDA, $108 million of net income and $189 million of operating cash flow. After $12 million of capital spending, reported free cash flow was $177 million. Those measures answer different questions. [S3]
| USD millions | 2023 | 2024 | 2025 | First Half 2025 | First Half 2026 |
|---|---|---|---|---|---|
| Revenue | 1,485 | 1,613 | 1,750 | 859 | 923 |
| GAAP operating profit | 239 | 298 | 339 | 180 | 163 |
| Net income | 163 | 208 | 220 | 123 | 108 |
| Operating cash flow | 393 | 427 | 485 | 233 | 189 |
| Capital spending | 18 | 15 | 24 | 8 | 12 |
| Reported free cash flow | 375 | 412 | 461 | 225 | 177 |
| Stock compensation | 20 | 28 | 22 | 9 | 9 |
These are carve-out accounts: the business’s financial history while it was part of its former parent, rather than a record of independent operations. Revenue growth alongside a decline in first-half operating cash is a reason to examine the cash movements, not sufficient proof of lasting improvement or deterioration. [S2–S3]
Our forward measure, owner cash, means cash left after stock compensation’s economic cost, interest and fees, cash taxes, ordinary capital spending, investment in working capital, and transition spending. Working capital is cash tied up in the business’s operating balances. In the central rolling-year model, $780.1 million of adjusted EBITDA becomes $355.4 million of owner cash. This is a modeled measure, not reported free cash flow or a promised distribution.
Debt and Independence Have Costs
The June balance sheet shows $186 million of cash and $2 billion of debt principal. The notes require $110.6 million of annual coupons; the model allows another $1.4 million for cash financing fees. No note principal falls due within the twelve-month horizon. A $500 million revolving credit facility was undrawn, but access depends on its terms. Its leverage covenant is not the same as a simple debt-to-EBITDA calculation. [S3]
June cash is a proxy for our valuation, not a verified September balance. We reserve $100 million for operations and treat $86 million as excess cash. Stock awards are charged as an economic cost even though they may not initially require cash: paying employees in shares can dilute existing owners. The model represents that cost as cash spent to offset dilution and keeps the share count fixed, avoiding a second charge for the same awards.
Goodwill and acquired intangible assets do not establish a minimum recovery value. The annual financial statements received an unqualified audit opinion, with goodwill valuation identified as a critical audit matter. The second-quarter filing reported effective disclosure controls, but the new-company transition meant there was no management assessment or auditor attestation of internal control over financial reporting. That is not a completed independent controls audit. [S2–S3]
Management’s Choices Still Matter
The chief executive brings long CARFAX operating experience; the chief financial officer is newer. That is useful context, not a demonstrated record of independent-company capital allocation. Historical bonuses emphasized adjusted profit, revenue and individual objectives. Future incentive weights were not established in the material reviewed, so tight alignment with per-share owner cash is not assumed. [S2, S16]
Common shares carry one vote and directors face annual elections, while preferred-stock authority and takeover provisions remain relevant. S&P Global retained no equity, but separation agreements and a parent executive on the board create continuing relationships. The disclosed employment arrangement involving the chief executive’s brother warrants attention without implying misconduct. [S1–S2]
Director Mark Peek bought 50,000 shares in the open market in August at approximately $19.50–$19.87. Other sampled filings show grants or tax withholding, which are different transactions. BlackRock reported an 11.3% holding; that does not prove investment conviction or that forced selling is over. [S17–S19]
Management’s stated sequence puts transition spending and dividends ahead of expected repurchases in early 2027, with material acquisitions deferred during separation. No future buyback amount or extra buyback benefit is assumed. Tax-separation restrictions and possible indemnities also constrain allocation. [S2–S5]
Evidence: Reported Earnings and Cash, From EBITDA to Owner Cash, and Debt and Other Claims.
Valuation and Alternatives
What $17.87 Requires
We value the operating business using forward adjusted EBITDA at both entry and exit, then subtract debt and add excess cash to reach the value belonging to common shareholders. Enterprise value refers to the value of the operating business before that debt-and-cash bridge; equity value is what remains for shareholders. The valuation multiple expresses how many dollars of business value investors pay for each dollar of the selected earnings measure.
At $17.87 and 294.821320 million shares, the equity value is about $5.27 billion. Adding $2 billion of debt and subtracting only the $86 million of excess cash gives approximately $7.18 billion, or 9.21 times central forward adjusted EBITDA. The central exit assumption is 8.5 times, a modest valuation decline that is a judgment, not a quoted peer average.
The central case assumes $1.975 billion of revenue and a 39.5% adjusted EBITDA margin for the rolling year after the reference date. Margin means the share of revenue left as the specified profit measure. It includes recurring standalone costs and gives no credit for the targeted annual margin improvement. But it should not automatically be called conservative. Management’s 2026 guidance implies approximately 38.4% for the second half after subtracting reported first-half results; our 39.5% assumption concerns the following rolling period, not that half-year or calendar-year guidance. [S3]
Outcomes and the Beliefs Behind Them
The following returns are approximate conditional averages within broad outcome ranges. They are not range boundaries, promises or maximum losses. The weights are subjective estimates for this decision, rather than statistically calibrated odds.
| Outcome | MBGL Probability | MBGL Twelve-Month Return | SPY Probability | SPY Twelve-Month Return |
|---|---|---|---|---|
| Severe | 5% | −90.0% | 5% | −51.8% |
| Adverse | 25% | −33.6% | 20% | −16.3% |
| Central | 50% | +3.8% | 55% | +10.1% |
| Favorable | 20% | +56.4% | 20% | +27.4% |
| Probability-weighted return | 100% | +0.3% | 100% | +5.2% |
These columns describe each investment’s own outcome distribution. A row does not mean the two outcomes always happen together; the joint scenario illustration makes the dependence assumptions explicit. SPY returns include the modeled fund expense once. Both comparisons exclude personal taxes and trading costs.
For MBGL, recurring revenue supports the 50% central weight. Sales friction, customer budgets and transition costs justify a meaningful 25% adverse weight. Product adoption, cross-selling and international growth support the 20% favorable allowance, but separate profitability and retention evidence are still limited. The 5% severe allowance covers data-access failures, major liabilities, transition failures and market or financing crises interacting with debt. There is no evidence of an imminent severe event; 5% is deliberately coarse, and alternative weights test 2–10%.
SPY receives more central weight because its earnings come from many businesses. Its starting valuation and concentration still matter: its ten largest holdings represented about 38.8% of the September 24 holdings reviewed. Broader diversification does not eliminate market loss. [S11]
A Small Change in Valuation Changes the Answer
Keep each investment’s original severe outcome and 5% probability, but hold all ordinary exit multiples at their respective entry levels. MBGL’s weighted return becomes 6.85%, against 6.42% for SPY. The resulting 0.43-percentage-point advantage reverses the base preference. It is small relative to the uncertainty in operations, valuation and severe-event assumptions.
MBGL’s ordinary disappointment case assumes $1.935 billion of first-year revenue and a 39% margin, followed by 4% growth and a 39% margin. At the central exit multiple, that produces −3.3%. Holding the entry multiple instead gives +7.3%, below SPY’s +11.0% central unchanged-multiple case. The comparison is between two specified cases, not a new probability-weighted result.
A separate discounted cash-flow valuation—estimating future business cash and reducing it to a value today—provides a longer-term cross-check. With five explicit years, 6% revenue growth, a 39.5% margin, an 11% discount rate and 3% growth thereafter, it indicates $16.10 per share. Changing discount rates to 10–12% and long-term growth to 2–3% produces $12.05–$19.41. Between 65% and 74% of business value comes from cash beyond the five explicit years. That sensitivity range is not a confidence interval, and the model gives no assurance of price convergence within twelve months.
SPY uses trailing earnings at both entry and exit, while MBGL uses forward earnings because spin-off costs distort its trailing profits. SPY’s starting trailing price-to-earnings ratio is about 25.21 after adjusting September 24 fund data to the September 25 price. Holding ordinary multiples unchanged improves the comparison, but does not make the earnings periods or economics identical: MBGL’s debt and retained cash still affect shareholder value differently. [S10–S11]
Lower-Risk References
The September 25 Treasury curve showed a 4.50% one-year par yield. That is a reference yield, not an executable bill quote, an annual percentage yield or a guaranteed return from a particular bond. Settlement, coupons, price, maturity and costs would need to be established for an actual purchase; selling early adds price risk. [S12]
Marcus advertised a 3.90% APY on a twelve-month CD on September 26, with a $500 minimum. The comparison assumes holding through the funded term and leaving interest in the account; its maturity may not coincide with the equity endpoint. The one-year early-withdrawal penalty is 90 days’ interest on original principal. Goldman Sachs Bank USA deposits aggregate for FDIC limits, generally $250,000 per depositor, per bank, per ownership category. Eligibility, balances and available terms must be checked before funding. These alternatives also face inflation and personal-tax considerations. [S13–S15]
Evidence: Valuation Inputs and Formulas, Benchmark Assumptions, and Sensitivity and Loss Limits.
Risks and Countercase
The strongest opposing view is that the current price already compensates investors for the transition. Recurring customers and continued growth may generate adequate cash without a higher valuation multiple. Our own unchanged-multiple comparison slightly favors MBGL. More optimistic MBGL probabilities also lift its weighted return to 8.3%, above the base SPY estimate. A blanket reduction argument would ignore that evidence.
The risk is that useful products do not translate into enough shareholder reward. Suppliers, advertising platforms, employees or competitors may capture more of the economics. New products may take longer to sell, and their growth may demand additional spending. Tax cash payments, transition costs and compensation settlement remain important uncertainties. There had been no reported standalone post-separation quarter at the cutoff.
When weaker revenue, lower margins, greater transition expense and a lower valuation arrive together, our linked-setback case produces −51.5%. Adding a hypothetical $300 million equity raise at $8 per share produces −51.9%, with the proceeds counted once and the additional shares recognized. Neither calculation establishes that financing would be available or that solvency is assured.
The severe case’s −90% return is also not a loss floor. Fully paid shares can lose their entire purchase value. The precise mathematical conditions, broader limitations and alternative probability weights are in the evidence; the model does not measure the exact probability of loss or outperformance.
The research relies principally on issuer disclosures, with competing-product checks. It does not include customer interviews, an independent audit of customer economics or verification of transcripts against original audio. Management forecasts remain attributed estimates. Those limitations matter most where the valuation depends on retention, cash taxes and transition timing.
Evidence: Sensitivity and Loss Limits and Business Sources and Limits.
What Would Change Our View
A materially lower price, demonstrated standalone cash conversion, or evidence that new products can grow without disproportionate marketing and technology spending could support a buying rating. Verified loss of data access, persistent dealer churn, uncontrolled transition costs or destructive capital allocation could support reducing exposure. These are conditions that would change the view, not assertions that they have occurred.
We have also fixed four operating tests. They ask whether first-half 2027 revenue grows at least 5% with positive CARFAX subscription growth; whether the company meets the low end of 2026 EBITDA guidance and a separate first-half 2027 margin threshold; whether cash remains positive after capital spending and stock compensation without new borrowing needed for the common dividend; and whether transition costs and acquisition financing stay within the stated limits. The exact windows, paired conditions and treatment of missing information are preserved below.
Evidence: Operating Tests and Return Rules.
Rating Rationale
5/10 — Consider other opportunities. At $17.87, the twelve-month case does not establish enough advantage over SPY for new money. Recurring revenue and useful data support a credible case for continued ownership, while cash conversion, timing and valuation uncertainty restrain buying confidence.
Why not 4 — Trim? A reduction case is not robust across reasonable competing assumptions. Holding ordinary multiples unchanged slightly favors MBGL, and more favorable company weights reverse the base comparison. Permanent franchise impairment has not been established.
Why not 6 — Consider buying? The small advantage in the unchanged-multiple comparison is not dependable enough. Buying requires greater confidence in sustained growth, cash conversion or valuation than the evidence supports, and ordinary disappointment weakens even that opposing case.
The rating is a judgment about the security at the stated price and horizon. It is not a return promise, trade instruction or position size.
Public disclosures
The Publisher reports no conflicting interests, investment positions or partnerships relevant to this report.
Prepared with AI assistance.
This research is for general information, not personalized investment advice. Scenarios and probabilities are assumptions, not promises. Investing can result in loss, and the analysis does not account for an individual reader’s circumstances.