OPENLANE (KAR) AI Stock Analysis

• Market Cap: $2.02B
• Dividend Yield: N/A
• Average Volume (3M): 1.01M
• Price to Earnings (P/E): 41.5
• Beta (1Y): 1.03
• Revenue Growth: 6.47%
• EPS Growth: N/A
• Country: US
• Employees: 4,080
• Sector: Consumer Cyclical
• Sector Strength: 55
• Industry: Auto - Dealerships
• EPS (TTM): 0.46
• Shares Outstanding: 106,910,774
• 10 Day Avg. Volume: 1,323,091
• 30 Day Avg. Volume: 1,013,351
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.23
• Price to Cash Flow (P/CF): 16.80
• P/FCF Ratio: 9.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $23.75
• Price Target Upside: 29.64% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

Kar Auction Services is on a recovery path with strong financial performance and robust cash flows. The earnings call provides a positive outlook, supported by strategic investments and growth in key segments. However, the stock is currently overvalued with technical indicators suggesting a bearish trend. These mixed signals result in a moderate overall stock score.

Positive Factors

Business Model

OPENLANE's dealer business is growing by offering a better, faster, higher value solution at a lower cost representing a highly scalable, competitively differentiated business model.

Digital Capabilities

KAR's digital capabilities provide it a secular tailwind.

Market Share

KAR has a 70% to 75% market share in the off-lease auction use.

Negative Factors

Auto Import Tariffs

Auto import tariffs raise the price of used vehicles and potentially diminish the supply of new vehicles as a risk to our bullish thesis.

Commercial Vehicle Volumes

Management continues to see pressure on commercial vehicle volumes in 2025 due to lower off-lease maturities.

Investor Uncertainty

The businesses underlying the KAR ticker have changed materially, which might create uncertainty for some investors.

OPENLANE Business Overview & Revenue Model

Company Description

Kar Auction Services (KAR) is a leading provider of vehicle auction services and related technology solutions in North America. The company operates through its extensive network of physical and digital auction platforms, facilitating the exchange of used and salvaged vehicles. KAR serves a diverse range of customers, including automotive manufacturers, financial institutions, insurance companies, and dealers, by offering a comprehensive suite of services aimed at streamlining the vehicle remarketing process.

How the Company Makes Money

KAR generates revenue primarily through transaction fees and ancillary services provided during vehicle auctions. The company's auction platforms, such as ADESA, charge sellers a fee for listing vehicles and buyers a fee upon successful purchase. In addition to these fees, KAR offers value-added services, including vehicle inspection, reconditioning, transportation, and financing solutions, which contribute to its revenue stream. The company's digital auction platforms enhance its reach and operational efficiency, allowing for higher transaction volumes and customer engagement. Strategic partnerships with automotive manufacturers and financial institutions further bolster its earnings by ensuring a steady supply of vehicles and expanding its customer base.

OPENLANE Financial Statement Overview

Summary

Kar Auction Services is showing signs of recovery with strong revenue growth and improved profitability metrics. The company's cash flow is robust, supporting operational needs and investment capabilities. However, the balance sheet reflects a need for cautious management of debt and equity to ensure long-term stability.

Income Statement

Kar Auction Services shows a positive trend in revenue growth with a 8.71% increase over the past year, indicating recovery. The gross profit margin is healthy at 46.54%, reflecting operational efficiency. Net profit margin improved to 6.14%, a significant turnaround from the previous year's loss. EBIT and EBITDA margins are at 10.19% and 21.06% respectively, showing improvement but still reflecting moderate operational challenges.

Balance Sheet

The debt-to-equity ratio stands at 0.21, which is manageable but suggests reliance on debt financing. Return on equity (ROE) is 8.19%, indicating moderate profitability relative to shareholder equity. The equity ratio is 39.03%, showing a relatively balanced capital structure. However, the decrease in stockholders' equity over time is a concern.

Cash Flow

The company displays strong cash flow management with a 30.73% increase in free cash flow year-over-year. The operating cash flow to net income ratio of 2.66 highlights robust cash generation from operations. Free cash flow to net income ratio is 2.18, showing effective conversion of earnings into cash.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.79B	1.65B	1.52B	2.25B	2.19B
	Gross Profit
832.20M	777.50M	685.10M	951.70M	902.90M
	EBIT
182.20M	-5.20M	173.70M	210.60M	136.40M
	EBITDA
274.90M	110.80M	258.00M	237.40M	325.60M
	Net Income Common Stockholders
109.90M	-154.10M	28.60M	66.50M	500.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
143.00M	93.50M	225.70M	190.00M	752.10M
	Total Assets
4.62B	4.73B	5.12B	7.42B	6.80B
	Total Debt
282.90M	427.40M	573.70M	2.18B	2.22B
	Net Debt
139.90M	333.90M	348.00M	1.99B	1.47B
	Total Liabilities
3.28B	3.40B	2.99B	5.31B	4.63B
	Stockholders Equity
1.34B	1.94B	2.13B	2.10B	2.17B
Cash Flow		Free Cash Flow
238.40M	183.40M	-473.40M	304.70M	283.00M
	Operating Cash Flow
291.40M	235.40M	-412.50M	413.20M	384.40M
	Investing Cash Flow
-70.90M	-83.50M	2.14B	-1.22B	-326.60M
	Financing Cash Flow
-173.90M	-279.90M	-1.61B	210.40M	194.80M

OPENLANE Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 18.32
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KAR, the sentiment is Negative. The current price of 18.32 is below the 20-day moving average (MA) of 19.78, below the 50-day MA of 20.46, and below the 200-day MA of 18.66, indicating a bearish trend. The MACD of -0.29 indicates Positive momentum. The RSI at 46.06 is Neutral, neither overbought nor oversold. The STOCH value of 25.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KAR.

OPENLANE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CARS	73 Outperform	$746.38M	16.35	9.60%	―	4.35%	-58.76%
CANG	69 Neutral	$368.43M	5.35	7.59%	―	-53.97%	―
KAR	62 Neutral	$2.02B	41.50	4.80%	―	6.47%	―
CRMT	60 Neutral	$392.44M	52.79	1.50%	―	-2.26%	―
Sector *	59 Neutral	$11.76B	10.11	-0.70%	3.92%	1.27%	-16.30%
ACVA	56 Neutral	$2.45B	―	-17.78%	―	32.40%	-2.74%
UXIN	40 Underperform	$637.14M	―	260.24%	―	9.33%	50.69%

OPENLANE Corporate Events

Kar Auction Services Highlights Strategic Growth and Innovation

OPENLANE, Inc. is set to hold a virtual investor update, emphasizing strategic growth, innovation, and risk management in the wholesale used vehicle market. With a focus on leveraging technology and AI to enhance customer experiences, the company highlights its strong cash flow and investment potential. The presentation underscores OPENLANE’s competitive advantages and its commitment to delivering shareholder value through improved financial reporting and a robust product pipeline.