KAR Auction Services Inc. (NYSE: KAR) stock fell -3.21% on Friday to $16.00 against a previous-day closing price of $16.53. With 2.14 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.09 million shares. During the session, the Specialty Retail company that operates in wider Consumer Cyclical sector, reached to the highest price of $17.00 whereas the lowest price it dropped to was $15.65. The 52-week range on KAR shows that it touched its highest point at $22.10 and its lowest point at $11.76 during that stretch. It currently has a 1-year price target of $21.00. Beta for the stock currently stands at 1.36.
Price Performance and Earnings:
Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of KAR was down-trending over the past week, with a drop of -3.50%, but this was up by 1.52% over a month. Three-month performance surged to 9.59% while six-month performance rose 11.42%. The stock lost -4.82% in the past year, while it has gained 2.43% so far this year. A look at the trailing 12-month EPS for KAR yields -0.10 with Next year EPS estimates of 0.83. For the next quarter, that number is 0.09. This implies an EPS growth rate of 198.70% for this year and 99.76% for next year. EPS is expected to grow by 14.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -36.80%.
Float and Shares Shorts:
At present, 121.40 million KAR shares are outstanding with a float of 119.55 million shares on hand for trading. On Jul 14, 2022, short shares totaled 7.82 million, which was 6.44% higher than short shares on Jun 14, 2022. In addition to Mr. James P. Hallett as the firm’s Exec. Chairman, Mr. Peter J. Kelly serves as its CEO & Director.
Through their ownership of 110.69% of KAR’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 54.49% of KAR, in contrast to 51.37% held by mutual funds. Shares owned by individuals account for 17.38%. As the largest shareholder in KAR with 14.83% of the stake, BlackRock Fund Advisors holds 18,018,888 shares worth 18,018,888. A second-largest stockholder of KAR, The Vanguard Group, Inc., holds 12,965,634 shares, controlling over 10.67% of the firm’s shares. Burgundy Asset Management Ltd. is the third largest shareholder in KAR, holding 7,241,918 shares or 5.96% stake. With a 7.05% stake in KAR, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 8,570,468 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.96% of KAR stock, is the second-largest Mutual Fund holder. It holds 3,595,430 shares valued at 53.1 million. Vanguard Small Cap Index Fund holds 2.53% of the stake in KAR, owning 3,072,077 shares worth 45.37 million.
An Overview of Recent Financials:
Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2022, KAR reported revenue of $369.40M and operating income of $13.70M. Over the past year, revenue came in at $2.25B while operating income stood at $192.50M. It generated -$300.00k net income for the quarter, which came to $15.30M over the last twelve months. The EBITDA in the recently reported quarter was $42.70M and diluted EPS was -$0.09. EBITDA for the full year was $392.50M.
Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for KAR since 9 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 4 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With KAR analysts setting a high price target of $28.00 and a low target of $14.00, the average target price over the next 12 months is $21.57. Based on these targets, KAR could surge 75.0% to reach the target high and fall by -12.5% to reach the target low. Reaching the average price target will result in a growth of 34.81% from current levels.
EPS: Estimates vs Actual
It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. KAR will report FY 2022 earnings on 02/15/2023. Analysts have provided yearly estimates in a range of $0.56 being high and $0.30 being low. For KAR, this leads to a yearly average estimate of $0.42. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. KAR Auction Services Inc. surprised analysts by -$0.03 when it reported $0.04 EPS against a consensus estimate of $0.07. The surprise factor in the prior quarter was -$0.15. Based on analyst estimates, the high estimate for the next quarter is $0.11 and the low estimate is $0.02. The average estimate for the next quarter is thus $0.07.
Summary of Insider Activity:
Insiders traded KAR stock several times over the past three months with 9 Buys and 1 Sells. In these transactions, 177,632 shares were bought while 141 shares were sold. The number of buy transactions has increased to 54 while that of sell transactions has risen to 40 over the past year. The total number of shares bought during that period was 353,768 while 49,732 shares were sold.