KAR Auction Services Reports $420.6M Revenue, Beating Estimates by $33.12M Despite In-Line GAAP EPS of $0.01

Trending News 🌧️

KAR ($NYSE:KAR) Auction Services, an automotive remarketing and technology solutions provider, reported revenue of $420.6M, beating estimates by $33.12M despite a GAAP Earnings Per Share (EPS) of $0.01 that was in line with expectations. KAR Auction Services, Inc. is an industry leader in providing end-to-end solutions to automotive remarketers. Through its various brands, ADESA and Automotive Finance Corporation, it provides sales and support services to the wholesaling, retailing, and financing of used cars and trucks. The company also has strategic partnerships with major online auto retailers that allow it to leverage its services and technology solutions to secure new customers and gain market share. KAR Auction Services is committed to providing its customers with innovative solutions and customer service excellence.

Its goal is to become the most trusted partner in the automotive industry, driving long-term customer loyalty and growth. KAR Auction Services’ strong revenue performance demonstrates the success of its strategic partnerships and its ability to provide innovative solutions and services to its customers. The company’s in-line GAAP EPS of $0.01 further reinforces the strength of its financials as it continues to seek out opportunities for growth across all its markets.

Earnings

Despite an in-line GAAP earnings per share (EPS) of $0.01, the company’s net income saw an impressive 627.5% increase from the previous year, reaching a total of $37.1M USD. Furthermore, a comparison of their performance over the last 3 years reveals that their total revenue has decreased by 32.1%, dropping from $529.6M USD to $372.8M USD. While this signals a dip in quarterly performance, KAR AUCTION SERVICES was still able to beat the projected earnings and post a large gain in net income.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for KAR. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for KAR. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for KAR. More…

Key Ratios Snapshot

Some of the financial key ratios for KAR are shown below. More…

Share Price

Despite this impressive feat, the company’s GAAP EPS was only reported to be $0.01, which was in line with expectations. KAR AUCTION SERVICES stock opened at $13.6 and closed at $13.4, down by 2.2% from the previous closing price of 13.7. This minor dip in share prices can be attributed to investors unimpressed with the GAAP EPS results, despite the strong revenue numbers. Live Quote…

Analysis

GoodWhale has conducted an analysis of KAR AUCTION SERVICES’s wellbeing, and based on our Star Chart, KAR AUCTION SERVICES has an intermediate health score of 6/10 with regard to its cashflows and debt. This indicates that the company has the potential to pay off its debt and fund future operations. Additionally, KAR AUCTION SERVICES is classified as an ‘elephant’, meaning that it is a company that is rich in assets after deducting off liabilities. As such, KAR AUCTION SERVICES may be an attractive option for value investors, income investors, or growth investors looking for a stable investment with solid underlying financials. In terms of its specific strengths, the company is strong in its asset base, medium in profitability, and weak in dividend and growth potential. Ultimately, KAR AUCTION SERVICES appears to be a company with a solid foundation, making it a viable option for long term investors seeking consistent returns. More…

Peers

The company operates through three segments: ADESA, Inc, Insurance Auto Auctions, Inc, and Capital One Auto Finance. KAR Auction Services was founded in 2002 and is headquartered in Carmel, Indiana. Some of KAR Auction Services’ competitors include NowAuto Inc, America’s Car-Mart Inc, and Peter Warren Automotive Holdings Ltd.

– NowAuto Inc ($OTCPK:NWAU)

America’s Car-Mart, Inc. is engaged in the operation of used automobile dealerships in the United States. The company operates through two segments, Automotive Sales and Automotive Finance. It offers financing for the purchase of vehicles to customers who are unable to obtain traditional financing from banks or other lending institutions. The company also sells vehicles on consignment for customers. As of April 30, 2018, it operated 138 dealerships in 11 states. America’s Car-Mart, Inc. was founded in 1981 and is headquartered in Bentonville, Arkansas.

– America’s Car-Mart Inc ($NASDAQ:CRMT)

Warren Automotive Holdings Ltd is a car dealership company. It is headquartered in Sydney, Australia. The company has a market capitalization of 481.38 million as of 2022 and a return on equity of 11.46%. The company operates a chain of car dealerships across Australia. It offers a range of new and used cars, finance, insurance, and after-sales services.

Summary

KAR Auction Services is a vehicle auction and remarketing provider that recently released its fourth-quarter earnings report. According to the report, the company had a GAAP EPS (earning per share) of $0.01, which was on par with expectations. Revenue was reported at $420.6M, which was $33.12M above analyst estimates.

This was attributed to higher consignment volumes and improved performance in the company’s Remarketing and Insurance Auto Auctions segments, which outweighed weak performance in their Digital segment. Moving forward, investors should focus on KAR Auction Services’ new growth initiatives, including their partnership with Waymo and their expansion into new markets.