Download PDF

1. Company Snapshot

1.a. Company Description

America's Car-Mart, Inc., through its subsidiaries, operates as an automotive retailer in the United States.It primarily sells older model used vehicles and provides financing for its customers.As of April 30, 2022, the company operated 154 dealerships in the South-Central United States.


The company was founded in 1981 and is based in Rogers, Arkansas.

Show Full description

1.b. Last Insights on CRMT

Recent negative drivers behind America's Car-Mart's performance include a 4-week decline of 15.1% and a period of oversold conditions, which may indicate exhaustion of selling pressure. However, strong earnings estimates revisions and a potential trend reversal are underway, driven by the company's improved loan metrics, 36.5% gross margin, and successful ABS transaction. Additionally, management's focus on improving liquidity and a centralized LOS system are key drivers of growth.

1.c. Company Highlights

2. America's Car-Mart's Strategic Actions Drive Future Growth

America's Car-Mart reported a revenue increase of 0.8% year-over-year, driven by higher interest income and a nominal increase in average retail sales price. The gross profit margin was 37.5%, compared to 39.4% in the prior year. Adjusted for a one-time benefit, margins improved by approximately 100 basis points year-over-year and 90 basis points sequentially. The company's loss per share for the quarter was $2.71, and adjusted EPS loss was $0.79 per share, missing analyst estimates of $0.69.

Publication Date: 08:48

📋 Highlights
  • Net Loss with Strategic Adjustments:: Reported $22.5M net loss, including $20M non-cash charges and $3.5M one-time expenses.
  • Transformative Financing:: Closed $300M term loan, enabling $31.4M annualized SG&A savings and optimizing store footprint (-10% reduction).
  • Credit Performance Improvements:: Delinquencies over 30 days improved 62bps to 3.14%, with 12% growth in higher-quality customer bookings.
  • Revenue & Margin Dynamics:: Revenue rose 0.8% YoY, while gross margin improved 100bps to 37.5% (adjusted for one-time benefits).
  • Capital Structure Flexibility:: $251M cash balance and plans for ABS transactions, with recent securitization oversubscribed 8x (Class A) and 16x (Class B).

Operational Highlights

The company's enhanced underwriting platform, LOS V2, continues to deliver better results, with 76.5% of volume coming from higher-ranked customers, a 12% improvement in higher-quality bookings. The Pay Your Way program is driving improved collections efficiency, reducing in-store payment traffic, and increasing overall payment consistency. The company's focus on technology, including AI, is expected to help it stay ahead of the competition.

Capital Structure Transformation

The company closed a transformative $300 million term loan in October, removing capital constraints and providing flexibility to optimize its store footprint and organizational structure. This loan will enable the company to execute a multi-phase plan to optimize its operations, with expected annualized SG&A savings of $31.4 million. The company plans to complete its capital structure transformation with another ABS transaction and a revolving warehouse facility in the second half of the year.

Valuation Analysis

The current valuation metrics indicate a 'P/S Ratio' of 0.21 and an 'EV/EBITDA' of 1.63. The 'P/E Ratio' is -14.93, and the 'P/B Ratio' is 0.39, suggesting that the market may be undervaluing the company's efforts to optimize its operations and improve credit performance. The 'ROIC' is 48.57%, and the 'ROE' is -2.57%, indicating a potential for improvement in return on equity.

Future Outlook

The company expects to rebuild its inventory in Q3, which will set it up for tax time. It plans to execute an ABS transaction, rebuild inventory, and set up for tax time. The company believes it will be set up nicely for the fourth quarter to take advantage of elevated tax refunds. Analysts estimate next year's revenue growth at 1.6%, indicating a potential for stable growth.

3. NewsRoom

Card image cap

CRMT Investor News: If You Have Suffered Losses in America’s Car-Mart, Inc. (NASDAQ: CRMT), You Are Encouraged to Contact The Rosen Law Firm About Your Rights

Dec -06

Source: globenewswire.com

Card image cap

Rosen Law Firm Encourages America's Car-Mart, Inc. Investors to Inquire About Securities Class Action Investigation - CRMT

Dec -05

Source: prnewswire.com

Card image cap

America's Car-Mart, Inc. (CRMT) Q2 2026 Earnings Call Transcript

Dec -04

Source: seekingalpha.com

Card image cap

America's Car-Mart Reports Second Quarter Fiscal Year 2026 Results

Dec -04

Source: globenewswire.com

Card image cap

CRMT Investor News: If You Have Suffered Losses in America's Car-Mart, Inc. (NASDAQ: CRMT), You Are Encouraged to Contact The Rosen Law Firm About Your Rights

Dec -03

Source: globenewswire.com

Card image cap

ROSEN, A TOP-RANKED LAW FIRM, Encourages America's Car-Mart, Inc. Investors to Inquire About Securities Class Action Investigation - CRMT

Dec -03

Source: newsfilecorp.com

Card image cap

ROSEN, A TOP-RANKED LAW FIRM, Encourages America's Car-Mart, Inc. Investors to Inquire About Securities Class Action Investigation - CRMT

Dec -02

Source: newsfilecorp.com

Card image cap

CRMT Investor News: If You Have Suffered Losses in America’s Car-Mart, Inc. (NASDAQ: CRMT), You Are Encouraged to Contact The Rosen Law Firm About Your Rights

Nov -30

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.50%)

6. Segments

Used Autos

Expected Growth: 7.43%

Used Autos from America's Car-Mart, Inc. growth driven by increasing demand for affordable vehicles, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on providing financing options to subprime customers and its 'buy-here, pay-here' model have contributed to its 7.43% growth.

Wholesales

Expected Growth: 7.4%

America's Car-Mart, Inc.'s 7.4% wholesale growth is driven by increasing demand for used vehicles, expansion into new markets, and strategic partnerships with dealerships. Additionally, the company's focus on providing affordable financing options and its 'no-haggle' pricing strategy have contributed to its growth. Furthermore, the rise of online car buying platforms has also boosted wholesale sales.

Service Contract

Expected Growth: 8.33%

America's Car-Mart, Inc.'s 8.33% growth in Service Contracts is driven by increasing demand for affordable used vehicles, expansion of financing options, and a growing customer base. Additionally, the company's focus on customer service, competitive pricing, and strategic store locations contribute to the growth. Furthermore, the rise of online sales and digital marketing efforts also support the segment's growth.

Accident Protection Plan

Expected Growth: 8.37%

The 8.37% growth of Accident Protection Plan from America's Car-Mart, Inc. is driven by increasing demand for vehicle service contracts, expansion into new markets, and a growing customer base seeking financial protection against unexpected vehicle repairs. Additionally, the company's focus on customer retention and loyalty programs contributes to the growth.

7. Detailed Products

Used Vehicles

America's Car-Mart, Inc. sells a wide range of used vehicles, including cars, trucks, vans, and SUVs, from various manufacturers.

Financing Options

The company offers financing options to customers, including in-house financing and third-party financing, to help them purchase vehicles.

Warranty and Service Contracts

America's Car-Mart, Inc. offers warranty and service contracts to provide customers with protection and maintenance for their vehicles.

Insurance Products

The company offers insurance products, such as GAP insurance and service contracts, to provide customers with additional protection.

8. America's Car-Mart, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Car-Mart's business model is focused on providing used vehicles to subprime customers, which reduces the threat of substitutes. Additionally, the company's focus on providing financing options to customers also reduces the threat of substitutes.

Bargaining Power Of Customers

Car-Mart's customers have some bargaining power due to the availability of alternative used car dealerships. However, the company's focus on providing financing options and its large inventory of vehicles reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Car-Mart has a large network of suppliers, which reduces the bargaining power of individual suppliers. The company's scale of operations also gives it negotiating power with suppliers.

Threat Of New Entrants

The used car market has high barriers to entry, including the need for significant capital to purchase inventory and establish a dealership network. This reduces the threat of new entrants.

Intensity Of Rivalry

The used car market is highly competitive, with many dealerships competing for customers. Car-Mart's focus on providing financing options and its large inventory of vehicles help it to differentiate itself from competitors, but the intensity of rivalry remains high.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 81.83%
Debt Cost 7.57%
Equity Weight 18.17%
Equity Cost 12.31%
WACC 8.43%
Leverage 450.37%

11. Quality Control: America's Car-Mart, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Kingsway Financial Services

A-Score: 4.6/10

Value: 4.6

Growth: 4.2

Quality: 3.7

Yield: 0.0

Momentum: 9.5

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
Driven Brands

A-Score: 4.5/10

Value: 6.0

Growth: 5.3

Quality: 3.0

Yield: 0.0

Momentum: 7.0

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
Cars

A-Score: 4.3/10

Value: 7.2

Growth: 5.4

Quality: 6.3

Yield: 0.0

Momentum: 2.5

Volatility: 4.3

1-Year Total Return ->

View Full Report
Stock-Card
Vroom

A-Score: 3.6/10

Value: 8.2

Growth: 4.6

Quality: 4.0

Yield: 0.0

Momentum: 5.0

Volatility: 0.0

1-Year Total Return ->

View Full Report
Stock-Card
America's Car-Mart

A-Score: 3.6/10

Value: 8.7

Growth: 3.6

Quality: 5.4

Yield: 0.0

Momentum: 1.5

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
RumbleON

A-Score: 3.3/10

Value: 8.0

Growth: 5.2

Quality: 2.9

Yield: 0.0

Momentum: 3.0

Volatility: 1.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.04$

Current Price

26.04$

Potential

-0.00%

Expected Cash-Flows