America’s Car-Mart, Inc. (CRMT) delivered better-than-expected first-quarter results aided by continued momentum in the business. Car-Mart operates automotive dealerships in twelve states and focuses exclusively on the “Integrated Auto Sales and Finance” segment of the used car market. Shares closed down 1.9% at $162.23 on August 17.
For the first quarter of Fiscal 2022, the company reported earnings of $3.57 per share, up 26% year-over-year, and beat the Street’s estimate of $3.55 per share.
Moreover, revenue grew 49.2% to $280.33 million compared to the year-ago period and significantly outpaced analysts’ estimates of $229.1 million.
The company’s robust revenue growth was attributed to increased average retail sales prices and a higher number of units sold. Markedly, at the quarter-end, Car-Mart had over 91,100 active customers and an average of 604 customers per dealership. (See America’s Car-Mart stock charts on TipRanks)
Commenting on the results, Jeff Williams, President and CEO of the company, said, “We continue to make foundational investments to our business model, and as expected, we are experiencing an increasing capacity to serve more customers at the highest levels.”
Williams added, “As we have stated, we believe that most of our dealerships can support 1,000 or more customers at some point in the future. We have significant opportunities for growth by increasing customer count at our existing locations and we will continue to push for market share gains. In addition, we will continue to open new dealerships and look for acquisition opportunities in markets that align with our business.”
Last month, Bank of America Securities analyst John Murphy maintained a Buy rating on the stock and lifted the price target to $194 (19.6% upside potential) from $151.
Murphy expected CRMT to beat estimates, vis-à-vis the poor outlook and expectations scenario for the automotive industry. Also, the analyst noted that the global semiconductor shortage is building pent-up demand for the automotive sector, which will be released over the years as the chip market recovers.
Overall, the stock has a Moderate Buy consensus rating based on 2 Buys and 1 Hold. The average America’s Car-Mart price target of $175.33 implies 8.1% upside potential to current levels. Shares have gained 55.2% over the past year.
Related News:
Walmart Exceeds Q2 Expectations, Lifts Guidance
Outbrain Shares Plunge 12% Despite Strong Q2 Results
CDK Global Misses Q4 Expectations; Shares Sink 10% After-Hours
