DB:XKR

Stock Analysis Report

Executive Summary

KAR Auction Services, Inc., together with its subsidiaries, provides used car auction and salvage auction services in the United States, Canada, Mexico, and the United Kingdom.

Snowflake

Fundamentals

Good value with acceptable track record.


Similar Companies

Share Price & News

How has KAR Auction Services's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: XKR's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

4.2%

XKR

-0.1%

DE Commercial Services

-1.0%

DE Market


1 Year Return

-60.4%

XKR

-0.7%

DE Commercial Services

9.1%

DE Market

Return vs Industry: XKR underperformed the German Commercial Services industry which returned -0.7% over the past year.

Return vs Market: XKR underperformed the German Market which returned 9.1% over the past year.


Shareholder returns

XKRIndustryMarket
7 Day4.2%-0.1%-1.0%
30 Day-7.9%5.8%4.4%
90 Day-11.7%19.1%13.0%
1 Year-59.3%-60.4%2.9%-0.7%12.5%9.1%
3 Year-42.9%-47.4%7.0%-2.3%24.8%13.8%
5 Year-16.9%-27.9%-0.2%-14.2%39.1%20.2%

Price Volatility Vs. Market

How volatile is KAR Auction Services's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is KAR Auction Services undervalued compared to its fair value and its price relative to the market?

25.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: XKR (€19.7) is trading below our estimate of fair value (€26.49)

Significantly Below Fair Value: XKR is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: XKR is good value based on its PE Ratio (9.6x) compared to the Commercial Services industry average (16.6x).

PE vs Market: XKR is good value based on its PE Ratio (9.6x) compared to the German market (19.4x).


Price to Earnings Growth Ratio

PEG Ratio: XKR is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: XKR is good value based on its PB Ratio (1.7x) compared to the DE Commercial Services industry average (2.7x).


Next Steps

Future Growth

How is KAR Auction Services forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

8.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: XKR's forecast earnings growth (8.8% per year) is above the savings rate (0.2%).

Earnings vs Market: XKR's earnings (8.8% per year) are forecast to grow slower than the German market (12.6% per year).

High Growth Earnings: XKR's earnings are forecast to grow, but not significantly.

Revenue vs Market: XKR's revenue (1.9% per year) is forecast to grow slower than the German market (4.9% per year).

High Growth Revenue: XKR's revenue (1.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: XKR's Return on Equity is forecast to be low in 3 years time (14%).


Next Steps

Past Performance

How has KAR Auction Services performed over the past 5 years?

13.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: XKR has high quality earnings.

Growing Profit Margin: XKR's current net profit margins (7.5%) are lower than last year (10%).


Past Earnings Growth Analysis

Earnings Trend: XKR's earnings have grown by 13.7% per year over the past 5 years.

Accelerating Growth: XKR's earnings growth over the past year (9.9%) is below its 5-year average (13.7% per year).

Earnings vs Industry: XKR earnings growth over the past year (9.9%) exceeded the Commercial Services industry 6.1%.


Return on Equity

High ROE: XKR's Return on Equity (18.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is KAR Auction Services's financial position?


Financial Position Analysis

Short Term Liabilities: XKR's short term assets ($3.3B) exceeds its short term liabilities ($2.5B)

Long Term Liabilities: XKR's short term assets (3.3B) exceeds its long term liabilities (2.4B)


Debt to Equity History and Analysis

Debt Level: XKR's debt to equity ratio (202.9%) is considered high

Reducing Debt: XKR's debt to equity ratio has increased from 170.4% to 202.9% over the past 5 years.

Debt Coverage: XKR's debt is not well covered by operating cash flow (19.1%).

Interest Coverage: XKR's interest payments on its debt are well covered by EBIT (3x coverage).


Balance Sheet

Inventory Level: XKR has a low level of unsold assets or inventory.

Debt Coverage by Assets: XKR's debt is not covered by short term assets (assets are 1x debt).


Next Steps

Dividend

What is KAR Auction Services's current dividend yield, its reliability and sustainability?

3.47%

Current Dividend Yield


Upcoming Dividend Payment

Purchase KAR Auction Services before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.5%marketbottom25%1.4%markettop25%3.7%industryaverage3.5%forecastin3Years4.3%

Current dividend yield vs market & industry

Notable Dividend: XKR's dividend (3.47%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: XKR's dividend (3.47%) is low compared to the top 25% of dividend payers in the German market (3.67%).


Stability and Growth of Payments

Stable Dividend: XKR has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: XKR has only been paying a dividend for 7 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (54.4%), XKR's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: XKR's dividends in 3 years are forecast to be well covered by earnings (38.1% payout ratio).


Next Steps

Management

What is the CEO of KAR Auction Services's salary, the management and board of directors tenure and is there insider trading?

2.4yrs

Average management tenure


CEO

Jim Hallett (66yo)

10.2yrs

Tenure

US$6,138,226

Compensation

Mr. James P. Hallett, also known as Jim, has been the Chief Executive Officer of KAR Auction Services, Inc. since September 08, 2009 and Chairman of the Board since December 31, 2014. Mr. Hallett served as ...


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD6.14M) is above average for companies of similar size in the German market ($USD2.62M).

Compensation vs Earnings: Jim's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.4yrs

Average Tenure

52yo

Average Age

Experienced Management: XKR's management team is considered experienced (2.4 years average tenure).


Board Age and Tenure

4.9yrs

Average Tenure

62yo

Average Age

Experienced Board: XKR's board of directors are considered experienced (4.9 years average tenure).


Insider Trading

Insider Buying: XKR insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$360,36212 Nov 19
Mark Hill
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares18,500
Max PriceUS$19.48

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Jim Hallett (66yo)

    Chairman & CEO

    • Tenure: 10.2yrs
    • Compensation: US$6.14m
  • Peter Kelly (50yo)

    President

    • Tenure: 0.8yrs
    • Compensation: US$1.53m
  • Eric Loughmiller (59yo)

    Executive VP & CFO

    • Tenure: 12.6yrs
    • Compensation: US$1.94m
  • Don Gottwald (52yo)

    Chief Strategy Officer and President of Digital

    • Tenure: 2.3yrs
    • Compensation: US$2.23m
  • Warren Byrd (56yo)

    Executive Vice President of Corporate Development & Real Estate

    • Tenure: 9.4yrs
  • Tom Fisher (45yo)

    Executive VP & Chief Information Officer

    • Tenure: 2.6yrs
  • John Hammer (48yo)

    President of ADESA

    • Tenure: 1.8yrs
    • Compensation: US$2.46m
  • Mike Eliason

    VP of Investor Relations & Treasurer

    • Tenure: 3.5yrs
  • Tobin Richer

    Senior Vice President of Marketing & Communications

    • Tenure: 0.9yrs
  • Patrick Ming

    Executive Sales Director

    • Tenure: 0.8yrs

Board Members

  • Jim Hallett (66yo)

    Chairman & CEO

    • Tenure: 10.2yrs
    • Compensation: US$6.14m
  • J. Howell (54yo)

    Independent Director

    • Tenure: 4.9yrs
    • Compensation: US$210.03k
  • Michael Kestner (65yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$220.03k
  • Mark Hill (63yo)

    Independent Director

    • Tenure: 5.4yrs
    • Compensation: US$210.03k
  • Stefan Jacoby (61yo)

    Independent Director

    • Tenure: 0.4yrs
  • Mary Smith (59yo)

    Director

    • Tenure: 0.08yrs
  • Stephen Smith (70yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$200.03k
  • David DiDomenico (49yo)

    Director

    • Tenure: 0.08yrs

Company Information

KAR Auction Services, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: KAR Auction Services, Inc.
  • Ticker: XKR
  • Exchange: DB
  • Founded: 1989
  • Industry: Diversified Support Services
  • Sector: Commercial Services
  • Market Cap: US$2.820b
  • Listing Market Cap: US$2.561b
  • Shares outstanding: 128.77m
  • Website: https://www.karauctionservices.com

Number of Employees


Location

  • KAR Auction Services, Inc.
  • 13085 Hamilton Crossing Boulevard
  • Carmel
  • Indiana
  • 46032
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KARNYSE (New York Stock Exchange)YesCommon StockUSUSDDec 2009
XKRDB (Deutsche Boerse AG)YesCommon StockDEEURDec 2009
KAR1 *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNDec 2009

Biography

KAR Auction Services, Inc., together with its subsidiaries, provides used car auction and salvage auction services in the United States, Canada, Mexico, and the United Kingdom. The company operates through ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/14 21:18
End of Day Share Price2019/11/14 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.