In a report released today, Gary Prestopino from Barrington maintained a Buy rating on OPENLANE (KAR – Research Report), with a price target of $25.00.
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Gary Prestopino has given his Buy rating due to a combination of factors including OPENLANE’s strong financial performance in Q1/25, where the company exceeded revenue and adjusted EBITDA expectations. The revenue increased by 7% and adjusted EBITDA rose by 10.7%, surpassing both the firm’s and consensus estimates. This growth was driven by a significant 14.7% increase in dealer volumes, marking the third consecutive quarter of growth, which indicates market share gains and enhanced dealer engagement on their auction platform.
Additionally, OPENLANE’s ability to control operating expenses, with only a 3.9% increase, contributed positively to their adjusted EBITDA. The Marketplace segment saw a 10.3% increase in revenue, despite a slight decrease in overall volume, due to a notable rise in dealer vehicle sales. The company’s robust cash flow generation and strategic expansion in the U.S., Canada, and Europe further support the positive outlook. The potential for digital market expansion, as indicated by the current 30% digital penetration in the U.S. dealer-to-dealer market, presents further growth opportunities for OPENLANE.
Based on the recent corporate insider activity of 26 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of KAR in relation to earlier this year.