America’s Car-Mart, Inc. (NASDAQGS:CRMT) is scheduled to report Q2 earnings results on November 18, 2019, after market close. The company is expected to report earnings of $1.80/share on revenue of $173.3 million. The consensus earnings per share (EPS) of $1.80/share is based on a poll of 3 analysts and represents a growth of 20.0% over the same quarter last year when the company reported earnings of $1.50/share.
The revenue forecast of $173.3 million based on a poll of 4 analysts implies a year-over-year (YoY) growth of 3.7%. Last year the company reported $167.2 million in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $173.35 | $167.17 | 3.7% |
| EPS | $1.80 | $1.50 | 20.0% |
In the company’s last investor presentation, management outlined the following future goals:
- Continue to grow store count: Add dealerships selectively in good, solid communities
- Increase Unit Sales Volumes: Increase customer count and market share per location
- Cash-on-Cash Returns: Continue to focus on lot – specific fully-loaded economic profit goals
- Solid Infrastructure: Continue to invest in support for higher sales and receivable volumes
Earnings Call Trends
Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q1, 2020 | $1.70 | $1.88 | 10.6% | Beat |
| Q4, 2019 | $1.82 | $2.01 | 10.4% | Beat |
| Q3, 2019 | $1.02 | $1.55 | 52.0% | Beat |
| Q2, 2019 | $1.20 | $1.50 | 25.0% | Beat |
| Q1, 2019 | $1.09 | $1.40 | 28.4% | Beat |
| Q4, 2018 | $1.09 | $1.31 | 20.2% | Beat |
| Q3, 2018 | $0.54 | $0.60 | 12.1% | Beat |
| Q2, 2018 | $0.75 | $0.79 | 5.3% | Beat |
What are your expectations from America’s Car-Mart for this quarter? Let us know in the comments!
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending July 31, 2019, the stock price reacted by increasing by 3.5%.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| 2019-08-15 | $88.85 | $92 | 3.5% | Increase |
| 2019-05-21 | $100 | $91.34 | -8.7% | Decline |
| 2019-02-19 | $82.14 | $84.91 | 3.4% | Increase |
| 2018-11-15 | $72.17 | $83.98 | 16.4% | Increase |
Fundamentals And Technical Analysis
America’s Car-Mart is currently trading at $87.66/share, up 2.2% for the day. The company is trading at approximately 84% of its 52-week high of $104.05/share. The company’s 14 Day Relative Price Index (RSI) of 35.30 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 11.0x and a forward P/E multiple of 10.9x.
America’s Car-Mart’s current share price also implies a price-to-book (P/B) multiple of 2.1x. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Fiscal Period | FY2020.Q1 |
| Period End Date | July 31, 2019 |
| Stock Price (Current) | $87.66 |
| P/E Ratio | 11.0x |
| P/E Ratio (Fwd) | 10.9x |
| PEG Ratio | -4.6 |
| Total Debt to Capital (%) | 25.6% |
| Levered Free Cash Flow | $18.042 million |
| Enterprise Value / EBITDA | 9.8x |
Company Profile: America’s Car-Mart, Inc.
America’s Car-Mart, Inc. is a small-cap stock with a market capitalization of $583.7 million and a total enterprise value of $780.9 million. The company operates in the Consumer Discretionary sector and Specialty Retail industry.
America’s Car-Mart, Inc., through its subsidiaries, operates as an automotive retailer in the United States. The company primarily sells older model used vehicles and provides financing for its customers. As of May 21, 2019, it operated 144 dealerships. America’s Car-Mart, Inc. was founded in 1981 and is based in Bentonville, Arkansas.
