NYSE:KAR

Stock Analysis Report

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Executive Summary

KAR Auction Services, Inc., together with its subsidiaries, used vehicle auctions and related vehicle remarketing services for the automotive industry in the United States, Europe, Canada, Mexico, and the United Kingdom.


Snowflake Analysis

Good value with moderate growth potential.


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: KAR's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.2%

KAR

-1.0%

US Commercial Services

-0.7%

US Market


1 Year Return

-47.2%

KAR

-6.9%

US Commercial Services

5.3%

US Market

Return vs Industry: KAR underperformed the US Commercial Services industry which returned -6.4% over the past year.

Return vs Market: KAR underperformed the US Market which returned 6.7% over the past year.


Shareholder returns

KARIndustryMarket
7 Day-3.2%-1.0%-0.7%
30 Day-11.3%0.008%4.6%
90 Day-1.8%10.1%14.0%
1 Year-45.7%-47.2%-5.5%-6.9%7.6%5.3%
3 Year-8.0%-67.8%34.2%25.9%34.9%26.1%
5 Year3.8%-65.8%72.0%54.4%62.3%44.7%

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

Valuation

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

14.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KAR ($13.09) is trading below our estimate of fair value ($15.22)

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


Price To Earnings Ratio

PE vs Industry: KAR is good value based on its PE Ratio (21.4x) compared to the US Commercial Services industry average (21.6x).

PE vs Market: KAR is poor value based on its PE Ratio (21.4x) compared to the US market (16.2x).


Price to Earnings Growth Ratio

PEG Ratio: KAR is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: KAR is good value based on its PB Ratio (1.1x) compared to the US Commercial Services industry average (1.4x).


Next Steps

Future Growth

How is KAR Auction Services forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

59.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KAR's forecast earnings growth (59% per year) is above the savings rate (2.2%).

Earnings vs Market: KAR's earnings (59% per year) are forecast to grow faster than the US market (22.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: KAR's revenue (7.7% per year) is forecast to grow slower than the US market (9.4% per year).

High Growth Revenue: KAR's revenue (7.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if KAR's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

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

-13.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KAR has high quality earnings.

Growing Profit Margin: KAR's current net profit margins (2.9%) are lower than last year (3.9%).


Past Earnings Growth Analysis

Earnings Trend: KAR's earnings have declined by -13% per year over the past 5 years.

Accelerating Growth: KAR's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: KAR had negative earnings growth (-19%) over the past year, making it difficult to compare to the Commercial Services industry average (4.7%).


Return on Equity

High ROE: KAR's Return on Equity (5.1%) is considered low.


Next Steps

Financial Health

How is KAR Auction Services's financial position?


Financial Position Analysis

Short Term Liabilities: KAR's short term assets ($2.7B) exceed its short term liabilities ($2.0B).

Long Term Liabilities: KAR's short term assets ($2.7B) exceed its long term liabilities ($2.4B).


Debt to Equity History and Analysis

Debt Level: KAR's debt to equity ratio (204.5%) is considered high.

Reducing Debt: KAR's debt to equity ratio has increased from 168% to 204.5% over the past 5 years.

Debt Coverage: KAR's debt is not well covered by operating cash flow (12.6%).

Interest Coverage: KAR's interest payments on its debt are not well covered by EBIT (1.6x coverage).


Balance Sheet


Next Steps

Dividend

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

2.18%

Forecast Dividend Yield


Dividend Yield vs Market

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

High Dividend: Unable to evaluate KAR'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 KAR's dividends per share have been stable in the past.

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


Current Payout to Shareholders

Dividend Coverage: KAR is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of KAR's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

4.2yrs

Average management tenure


CEO

Jim Hallett (67yo)

10.83yrs

Tenure

US$5,529,428

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 ($USD5.53M) is about average for companies of similar size in the US market ($USD4.72M).

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


Leadership Team

NamePositionTenureCompensationOwnership
James Hallett
Chairman & CEO10.83yrsUS$5.53m0.34% $5.7m
Peter Kelly
President1.5yrsUS$2.19m0.022% $375.8k
Eric Loughmiller
Executive VP & CFO13.25yrsUS$2.22m0.19% $3.2m
John Hammer
Chief Commercial Officer and President of ADESA0.33yrUS$2.18m0.0054% $90.8k
Thomas Fisher
Executive VP & Chief Information Officer3.25yrsno data0.0053% $89.0k
Michael Eliason
VP of Investor Relations & Treasurer4.17yrsno datano data
Charles Coleman
Senior VPno datano data0.0075% $126.7k
Tobin Richer
Senior Vice President of Marketing & Communications1.58yrsno datano data
Warren Byrd
Executive Vice President of Corporate Development & Real Estate10.08yrsno datano data
Patrick Ming
Executive Sales Director1.5yrsno datano data
Lisa Price
Executive VP & Chief People Officer7.08yrsno data0.018% $312.7k
Benjamin Skuy
Executive VP of International Markets & Strategic Initiatives10.83yrsUS$1.54m0.087% $1.5m

4.2yrs

Average Tenure

51yo

Average Age

Experienced Management: KAR's management team is considered experienced (4.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
James Hallett
Chairman & CEO10.83yrsUS$5.53m0.34% $5.7m
J. Howell
Independent Director5.58yrsUS$232.53k0.012% $200.9k
Michael Kestner
Lead Independent Director1yrUS$255.03k0.0046% $77.5k
Mark Hill
Independent Director6.08yrsUS$225.03k0.038% $641.4k
Stefan Jacoby
Independent Director1.08yrsUS$178.84k0.0018% $30.3k
Carmel Galvin
Independent Director0.42yrno data0.0016% $26.6k
Mary Smith
Independent Director0.75yrUS$100.39k0.0093% $158.0k
Stephen Smith
Independent Director6.58yrsUS$231.03k0.0060% $100.6k
David DiDomenico
Independent Director0.75yrUS$101.96k0.0077% $130.9k

1.1yrs

Average Tenure

62yo

Average Age

Experienced Board: KAR's board of directors are not considered experienced ( 1.1 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: Insufficient data to determine if 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.


Top Shareholders

Company Information

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


Key Information

  • Name: KAR Auction Services, Inc.
  • Ticker: KAR
  • Exchange: NYSE
  • Founded: 2006
  • Industry: Diversified Support Services
  • Sector: Commercial Services
  • Market Cap: US$1.691b
  • Shares outstanding: 129.21m
  • Website: https://www.karglobal.com

Number of Employees


Location

  • KAR Auction Services, Inc.
  • 11299 North Illinois Street
  • 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, used vehicle auctions and related vehicle remarketing services for the automotive industry in the United States, Europe, Canada, Mexico, and the United Kingdom. The company operates through two segments, ADESA Auctions and AFC. The ADESA Auctions segment offers whole car auctions and related services to the vehicle remarketing industry through online auctions and auction facilities. It also provides value-added services, such as auction related, transportation, reconditioning, inspection, title and repossession administration and remarketing, vehicle research, and analytical services, as well as data as a service. This segment sells its products and services through vehicle manufacturers, fleet companies, rental car companies, finance companies, and others. As of December 31, 2019, this segment had a network of 74 whole car auction facilities in North America. The AFC segment offers floorplan financing, a short-term inventory-secured financing to independent used vehicle dealers; and sells vehicle service contracts. It also provides wheel repair and hail catastrophe response services. The company serves vehicle manufacturers, vehicle rental companies, financial institutions, commercial fleets and fleet management companies, and dealer customers. The company was formerly known as KAR Holdings, Inc. and changed its name to KAR Auction Services, Inc. in November 2009. KAR Auction Services, Inc. was founded in 2006 and is headquartered in Carmel, Indiana. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/13 23:54
End of Day Share Price2020/07/13 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.