America’s Car-mart Stock Fair Value Calculator – AMERICA’S CAR-MART Reports Third Quarter FY2023 Earnings Results on January 31, 2023

Earnings Overview

On February 22 2023, AMERICA’S CAR-MART ($NASDAQ:CRMT) reported their earnings results for the third quarter of FY2023, ending on January 31 2023. Total revenue was USD 1.5 million, a decrease of 92.0% year-on-year. Net income, however, rose 11.9% to USD 326.5 million.

Transcripts Simplified

Net charge-offs as a percentage of average finance receivables were 5.9%, slightly above five year average of 5.6% but still below 10 year average of 6%. Primary driver of increased charge-offs was an increased frequency and severity of losses. Recovery rates decreased to about 28%. Delinquencies remained in line with historical percentages and trending positively. Accounts 30-plus days past due at 3.7% compared to 4% in prior year quarter.

Total collections up 11% to $153 million and total collections per active customer per month up 5.9% to $519. Average originating contract term for the quarter 42.5 months, up slightly from sequentially. Average selling price up $1,341 for the quarter versus prior quarter with only 2.1 month increase in term compared to prior year third quarter.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for America’s Car-mart. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for America’s Car-mart. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for America’s Car-mart. More…

Key Ratios Snapshot

Some of the financial key ratios for America’s Car-mart are shown below. More…

Stock Price

The results were mainly driven by a significant decline in revenues due to the challenging economic environment brought about by the pandemic. The company’s management stated that the third quarter was a challenging period and that they are taking steps to improve its operational efficiency and financial results. They also noted that they are confident that their efforts will allow them to deliver better results in the coming quarters.

Overall, the earnings report from AMERICA’S CAR-MART revealed a significant decrease in revenues and profits for the third quarter of FY2023, mainly due to the difficult economic environment brought about by the pandemic. The company is taking steps to improve its operational efficiency and financial results and is confident that better results can be achieved in the coming quarters. Live Quote…

Analysis – America’s Car-mart Stock Fair Value Calculator

At GoodWhale, we have completed a thorough fundamental analysis of AMERICA’S CAR-MART, uncovering a strong intrinsic value of $139.9. This valuation is based on our proprietary Valuation Line, which takes into account several factors including the company’s industry, financials, management, and more. At the current market price of $78.0, AMERICA’S CAR-MART is significantly undervalued by 44.3%. This presents an excellent opportunity for investors looking to capitalize on the company’s long-term potential. We encourage investors to take a closer look at AMERICA’S CAR-MART’s fundamentals and consider adding the stock to their portfolios. More…

Peers

In the American car industry, there is intense competition between Car-Mart Inc and its three main competitors, KAR Auction Services Inc, China Yongda Automobiles Services Holdings Ltd, and Copart Inc. Car-Mart Inc is the largest of the four companies, with a market share of 33%. KAR Auction Services Inc is the second largest, with a market share of 22%. China Yongda Automobiles Services Holdings Ltd is the third largest, with a market share of 17%. Copart Inc is the smallest of the four companies, with a market share of 8%.

– KAR Auction Services Inc ($NYSE:KAR)

KAR Auction Services Inc is a provider of vehicle auction and salvage services in North America. The company has a market cap of 1.48B as of 2022 and a ROE of 6.95%. KAR Auction Services operates through three segments: ADESA, Inc., an automotive auction company that provides wholesale vehicle auction and salvage services; Insurance Auto Auctions, Inc., a salvage auto auction company; and Automotive Finance Corporation, a provider of floorplan financing to independent used car dealers.

– China Yongda Automobiles Services Holdings Ltd ($SEHK:03669)

Yongda Automobiles Services Holdings Ltd is a leading provider of auto financing and car rental services in China. The company has a market cap of 8.14B as of 2022 and a return on equity of 14.36%. Yongda Automobiles Services Holdings Ltd offers a wide range of auto financing products and services to its customers, including car loans, leasing, and insurance. The company also operates a nationwide network of car rental outlets.

– Copart Inc ($NASDAQ:CPRT)

Copart Inc is a global leader in online vehicle auctions. The company has a market cap of 30.84B as of 2022 and a Return on Equity of 17.66%. Copart’s online vehicle auction platform connects buyers and sellers of salvage and clean title vehicles in a convenient online environment. The company offers a wide variety of vehicles for sale, including cars, trucks, motorcycles, boats, and RVs. Copart also offers a variety of services to its customers, including vehicle transportation, financing, and insurance.

Summary

Investing in AMERICA’S CAR-MART has been a challenge lately, with the company’s earnings report showing a 92.0% decline in revenue year-over-year for the third quarter of FY2023. Despite this, net income increased 11.9% to USD 326.5 million. This resulted in a decrease in stock price the same day. Investors should consider the long-term prospects of the company before making any decisions, as the current market conditions may not be reflective of the company’s true potential.