KAR: Share Repurchases And Preferred Buyback Will Drive Future Upside Potential

Analysts have modestly raised their price target on OPENLANE to $31.81 per share, reflecting slightly lower perceived risk and a marginally richer future earnings multiple based on their updated assumptions.

What's in the News

• Completed a common share repurchase of 1,463,403 shares, or 1.36 percent of shares outstanding, for a total of $35.63 million under the buyback program announced on May 7, 2025 (company disclosure)
• Repurchased 1,050,215 shares, or 0.98 percent of shares outstanding, for $26.28 million between July 1 and September 30, 2025, as the latest tranche under the ongoing buyback (company disclosure)
• Revised 2025 guidance to income from continuing operations of $139 million to $144 million, up from prior guidance of $132 million to $140 million, while now expecting a diluted loss from continuing operations per share of $1.32 to $1.28 instead of prior projected diluted income of $0.61 to $0.66 (company guidance)
• Closed the repurchase of 53 percent of its Series A Convertible Preferred Stock and amended its Credit Agreement to add $550 million in secured term loans to fund the transaction (company disclosure)

Valuation Changes

• Fair Value Estimate: Unchanged at $31.81 per share, indicating no revision to the intrinsic value assessment.
• Discount Rate: Decreased slightly from 8.14 percent to 8.00 percent, reflecting a modest reduction in perceived risk.
• Revenue Growth: Effectively unchanged at approximately 6.47 percent, signaling no material shift in top line expectations.
• Net Profit Margin: Stable at roughly 11.00 percent, with only immaterial rounding differences in the updated forecast.
• Future P/E: Declined slightly from 16.63x to 16.56x, implying a marginally lower valuation multiple on forward earnings.