Critical Analysis: America’s Car-Mart (CRMT) and The Competition

America’s Car-Mart (NASDAQ: CRMT) is one of 20 public companies in the “Automotive dealers & gasoline service stations” industry, but how does it compare to its competitors? We will compare America’s Car-Mart to related companies based on the strength of its institutional ownership, profitability, dividends, valuation, analyst recommendations, earnings and risk.

Analyst Recommendations

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This is a summary of recent ratings and price targets for America’s Car-Mart and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
America’s Car-Mart 0 2 0 0 2.00
America’s Car-Mart Competitors 116 608 661 28 2.43

America’s Car-Mart currently has a consensus target price of $47.50, indicating a potential downside of 7.14%. As a group, “Automotive dealers & gasoline service stations” companies have a potential upside of 17.33%. Given America’s Car-Mart’s competitors stronger consensus rating and higher possible upside, analysts plainly believe America’s Car-Mart has less favorable growth aspects than its competitors.

Profitability

This table compares America’s Car-Mart and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
America’s Car-Mart 5.30% 9.91% 5.24%
America’s Car-Mart Competitors 3.22% 33.52% 3.60%

Earnings and Valuation

This table compares America’s Car-Mart and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
America’s Car-Mart $587.75 million $20.20 million 20.06
America’s Car-Mart Competitors $8.01 billion $218.36 million 12.77

America’s Car-Mart’s competitors have higher revenue and earnings than America’s Car-Mart. America’s Car-Mart is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Institutional & Insider Ownership

82.2% of America’s Car-Mart shares are owned by institutional investors. Comparatively, 64.7% of shares of all “Automotive dealers & gasoline service stations” companies are owned by institutional investors. 11.7% of America’s Car-Mart shares are owned by insiders. Comparatively, 17.0% of shares of all “Automotive dealers & gasoline service stations” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

America’s Car-Mart has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, America’s Car-Mart’s competitors have a beta of 9.98, meaning that their average stock price is 898% more volatile than the S&P 500.

Summary

America’s Car-Mart competitors beat America’s Car-Mart on 9 of the 13 factors compared.

About America’s Car-Mart

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 April 30, 2017, it operated 140 dealerships in 11 states in the South-Central United States. America's Car-Mart, Inc. was founded in 1981 and is headquartered in Bentonville, Arkansas.

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