Used car superstore chain America's Car-Mart (NASDAQ:CRMT) turned in its earnings report late Monday, which was enough to give the company a 6.6% boost in trading yesterday. It's also held onto those gains going into trading today, and has even added further gains besides. The company not only turned in beats for earnings and revenue, but also revealed that some company records were actually beaten with this recent round of reporting. Financial analysts, meanwhile, are maintaining a long-standing bullish position on the company.
America's Car-Mart Earnings Report Proves Well-Tuned
America's Car-Mart locations delivered some fantastic numbers for the recent quarter, as the company came out with quarterly earnings of $6.19 per share. This was sufficient to not only destroy the Zacks consensus estimate of $2.69 per share, but dwarf earnings posted by the company this time last year. The company came out with $1.35 per share for the first quarter of 2020. Consensus-beating results are nothing new at America's Car-Mart, either; the company has beaten earnings estimates for each of the last four quarters.
Revenue, meanwhile, also came in above estimates and above last year's figures. The company posted revenue of $279.08 million, which not only beat the Zacks estimates by 22.62%, but also widely surpassed the year-ago earnings of $195.69 million. Revenue that beats estimates is likewise nothing new at America's Car-Mart, as the company has pulled off consensus-beating results for each of the last four quarters. Reports even note that that $279.08 million represents a company record.
Additionally, the company's president and CEO, Jeff Williams, offered some further insight, including a second broken company record. The company posted sales volume productivity of 36.5 sales per lot per month this quarter, which represented a new record high. Williams noted that the company is transitioning “...from a collections company to a sales company that is very good at collections.” New service contracts have also been well-received by the company's current customers, which suggests the potential for recurring revenue even after the sale.
Reports also suggest that the company is planning expansion efforts. While Williams didn't elaborate on numbers, a recent statement noted that the company would “...continue to open new locations and look for acquisition opportunities in the future.” Williams also offered explanations of how the company improved so significantly, noting that the revenue gains were driven mainly by an increase in the average retail sales price of around 15.9%, along with a significant increase in units sold at these higher prices, as units sold increased 24.3%.
What are Financial Analysts Saying About CRMT Stock?
The word from the financial analyst pool, as based on our latest research, is about as positive as can be. It's actually a unanimous “buy” right now, though right now, there's only one analyst covering the company. That's down from previous months, but America's Car-Mart has been rated a consensus “buy” for the last two years now, and then some.
A year ago, the company had three “buy” ratings and one “hold” to its credit. That dropped to two “buy” and one “hold” six months ago, which leads us to today, where the company has just one “buy” rating.
With one analyst covering the stock, the company's high, low, and average price targets are all the same number: $154 per share. Given that the company is currently trading at $161.19, there is some downside potential to consider. However, the rating in question—currently held by Stephens, which reiterated its “buy” rating back in early April—hasn't been adjusted in the last two months, which may account for some of the lag.
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