IAA (NYSE:IAA) - Share price, News & Analysis

IAA fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	1/6
Past Performance	4/6
Financial Health	3/6
Dividends	0/6

IAA Stock Overview

IAA, Inc. operates a digital marketplace that connects vehicle buyers and sellers.

Rewards

Trading at 17% below our estimate of its fair value

Earnings grew by 34.3% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 1.4% per year for the next 3 years

Has a high level of debt

IAA Competitors

Copart

NasdaqGS:CPRT

US$26.4b

KAR Auction Services

NYSE:KAR

US$1.8b

ACV Auctions

NasdaqGS:ACVA

US$1.3b

Price History & Performance

Summary of all time highs, changes and price drops for IAA
Historical stock prices
Current Share Price	US$39.23
52 Week High	US$63.49
52 Week Low	US$31.32
Beta	1.57
1 Month Change	7.60%
3 Month Change	6.84%
1 Year Change	-31.12%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	1.16%

Shareholder Returns

	IAA	US Commercial Services	US Market
7D	5.6%	2.1%	1.0%
1Y	-31.1%	-4.7%	-15.1%

Return vs Industry: IAA underperformed the US Commercial Services industry which returned -4.7% over the past year.

Return vs Market: IAA underperformed the US Market which returned -13.2% over the past year.

Price Volatility

Is IAA's price volatile compared to industry and market?
IAA volatility
IAA Average Weekly Movement	6.9%
Commercial Services Industry Average Movement	7.4%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: IAA is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: IAA's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1982	4,424	John Kett	https://www.iaai.com

IAA, Inc. operates a digital marketplace that connects vehicle buyers and sellers. The company’s platform facilitates the marketing and sale of total loss, damaged, and low-value vehicles for a range of sellers. It provides buyers with various bidding/buying digital channels, vehicle merchandising, evaluation services and online bidding tools, and replacement part inventory.

IAA Fundamentals Summary

How do IAA's earnings and revenue compare to its market cap?
IAA fundamental statistics
Market Cap	US$5.16b
Earnings (TTM)	US$303.40m
Revenue (TTM)	US$1.97b

17.3x

P/E Ratio

2.7x

P/S Ratio

Is IAA overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
IAA income statement (TTM)
Revenue	US$1.97b
Cost of Revenue	US$1.22b
Gross Profit	US$753.20m
Other Expenses	US$449.80m
Earnings	US$303.40m

Last Reported Earnings

Apr 03, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.26
Gross Margin	38.20%
Net Profit Margin	15.39%
Debt/Equity Ratio	317.8%

How did IAA perform over the long term?

See historical performance and comparison

Valuation

Is IAA undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

15.4%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: IAA ($38.51) is trading below our estimate of fair value ($46.38)

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

Price To Earnings Ratio

PE vs Industry: IAA is good value based on its Price-To-Earnings Ratio (17x) compared to the US Commercial Services industry average (21.8x).

PE vs Market: IAA is poor value based on its Price-To-Earnings Ratio (17x) compared to the US market (14.9x).

Price to Earnings Growth Ratio

PEG Ratio: IAA's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

Price to Book Ratio

PB vs Industry: IAA is overvalued based on its Price-To-Book Ratio (13x) compared to the US Commercial Services industry average (1.7x).

Future Growth

How is IAA forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-1.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: IAA's earnings are forecast to decline over the next 3 years (-1.4% per year).

Earnings vs Market: IAA's earnings are forecast to decline over the next 3 years (-1.4% per year).

High Growth Earnings: IAA's earnings are forecast to decline over the next 3 years.

Revenue vs Market: IAA's revenue (2.7% per year) is forecast to grow slower than the US market (7.7% per year).

High Growth Revenue: IAA's revenue (2.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: IAA's Return on Equity is forecast to be high in 3 years time (39%)

Past Performance

How has IAA performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

15.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: IAA has high quality earnings.

Growing Profit Margin: IAA's current net profit margins (15.4%) are lower than last year (15.6%).

Past Earnings Growth Analysis

Earnings Trend: IAA's earnings have grown by 15.6% per year over the past 5 years.

Accelerating Growth: IAA's earnings growth over the past year (34.3%) exceeds its 5-year average (15.6% per year).

Earnings vs Industry: IAA earnings growth over the past year (34.3%) exceeded the Commercial Services industry 30.2%.

Return on Equity

High ROE: Whilst IAA's Return on Equity (76.62%) is outstanding, this metric is skewed due to their high level of debt.

Financial Health

How is IAA's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: IAA's short term assets ($731.7M) exceed its short term liabilities ($480.6M).

Long Term Liabilities: IAA's short term assets ($731.7M) do not cover its long term liabilities ($2.3B).

Debt to Equity History and Analysis

Debt Level: IAA's net debt to equity ratio (283.4%) is considered high.

Reducing Debt: IAA's debt to equity ratio has increased from 83.3% to 317.8% over the past 5 years.

Debt Coverage: IAA's debt is well covered by operating cash flow (22.8%).

Interest Coverage: IAA's interest payments on its debt are well covered by EBIT (8.3x coverage).

Balance Sheet

Dividend

What is IAA current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate IAA's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate IAA's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if IAA's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if IAA's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as IAA has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.7yrs

Average management tenure

CEO

John Kett (57 yo)

10.92yrs

Tenure

US$4,990,903

Compensation

Mr. John W. Kett has been President at IAA, Inc. since June 02, 2011 and serves as its Chief Executive Officer since May 2014. Mr. Kett serves as Chief Financial Officer, Principal Accounting Officer and S...

CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD4.99M) is below average for companies of similar size in the US market ($USD8.23M).

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

Leadership Team

Experienced Management: IAA's management team is considered experienced (2.7 years average tenure).

Board Members

Experienced Board: IAA's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

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

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/05/26 00:00
End of Day Share Price	2022/05/26 00:00
Earnings	2022/04/03
Annual Earnings	2022/01/02