OPENLANE (KAR) AI Stock Analysis

• Market Cap: $2.46B
• Dividend Yield: N/A
• Average Volume (3M): 757.37K
• Price to Earnings (P/E): 39.3
• Beta (1Y): 0.89
• Revenue Growth: 9.42%
• EPS Growth: N/A
• Country: US
• Employees: 4,080
• Sector: Consumer Cyclical
• Sector Strength: 77
• Industry: Auto - Dealerships
• EPS (TTM): 0.31
• Shares Outstanding: 107,383,670
• 10 Day Avg. Volume: 637,023
• 30 Day Avg. Volume: 757,367
• PEG Ratio: 1.22
• Price to Book (P/B): 1.74
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.03
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 0.38
• Enterprise Value/Gross Profit: 3.40
• Enterprise Value/Ebitda: 1.82
• 1Y Price Target: $23.00
• Price Target Upside: 0.88% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 71 Outperform
• Price Target: $25.00 ▲(9.65%Upside)

Kar Auction Services demonstrates solid financial performance, particularly in cash flow management and revenue growth, which are supported by positive earnings call insights and strategic corporate events. While technical indicators show bullish momentum, potential overvaluation and balance sheet concerns introduce risks.

Positive Factors

Digital Capabilities

KAR's digital capabilities provide it a secular tailwind.

Financial Performance

OPENLANE's financial results for Q1/25 were better than expected, with total revenue increasing by 7% and adjusted EBITDA rising by 10.7%.

Market Share

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.

Negative Factors

Commercial Vehicle Volume Pressure

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

Finance Segment Challenges

Finance segment revenue decreased 4.67% to $106.2 million including a decrease of 13.35% in interest revenue.

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

OPENLANE, formerly known as KAR Auction Services, is a leading provider of wholesale used vehicle auctions and related services in North America. The company operates digital marketplaces that facilitate the sale and purchase of used vehicles, primarily focusing on serving commercial sellers such as vehicle manufacturers, fleet operators, and financial institutions. OPENLANE's core services include online auction platforms, vehicle logistics, and reconditioning services, catering to a diverse clientele in the automotive industry.

How the Company Makes Money

OPENLANE generates revenue primarily through fees collected from facilitating vehicle transactions on its digital auction platforms. The company charges sellers a fee for listing their vehicles and buyers a fee for purchasing vehicles through its marketplace. Additionally, OPENLANE earns income from ancillary services such as vehicle transportation, reconditioning, and inspection services offered to its commercial clients. Strategic partnerships with automotive manufacturers and financial institutions also contribute to its revenue, enhancing the company's service offerings and expanding its customer base. The integration of technology and data analytics further helps OPENLANE optimize its operations and improve customer experience, driving profitability.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.83B	1.79B	1.65B	1.52B	2.25B	2.19B
	Gross Profit
787.20M	832.20M	777.50M	685.10M	951.70M	902.90M
	EBIT
164.70M	182.20M	-5.20M	173.70M	210.60M	136.40M
	EBITDA
386.40M	274.90M	110.80M	258.00M	237.40M	325.60M
	Net Income Common Stockholders
128.30M	109.90M	-154.10M	28.60M	66.50M	500.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	143.00M	93.50M	225.70M	190.00M	752.10M
	Total Assets
0.00	4.62B	4.73B	5.12B	7.42B	6.80B
	Total Debt
284.00M	282.90M	427.40M	573.70M	2.18B	2.22B
	Net Debt
284.00M	139.90M	333.90M	348.00M	1.99B	1.47B
	Total Liabilities
3.43B	3.28B	3.40B	2.99B	5.31B	4.63B
	Stockholders Equity
1.37B	1.34B	1.94B	2.13B	2.10B	2.17B
Cash Flow		Free Cash Flow
265.10M	238.40M	183.40M	-473.40M	304.70M	283.00M
	Operating Cash Flow
317.10M	292.80M	235.40M	-412.50M	413.20M	384.40M
	Investing Cash Flow
-95.00M	-70.90M	-83.50M	2.14B	-1.22B	-326.60M
	Financing Cash Flow
152.10M	-173.90M	-279.90M	-1.61B	210.40M	194.80M

OPENLANE Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 22.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KAR, the sentiment is Positive. The current price of 22.8 is above the 20-day moving average (MA) of 21.93, above the 50-day MA of 20.18, and above the 200-day MA of 19.21, indicating a bullish trend. The MACD of 0.84 indicates Negative momentum. The RSI at 69.50 is Neutral, neither overbought nor oversold. The STOCH value of 89.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KAR.

OPENLANE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CARS	74 Outperform	$638.93M	15.11	9.35%	―	2.24%	-57.33%
KAR	71 Outperform	$2.46B	39.30	5.46%	―	9.42%	―
ACVA	68 Neutral	$2.77B	―	-16.49%	―	32.89%	7.44%
CRMT	67 Neutral	$410.78M	55.26	1.50%	―	-2.26%	―
Sector *	62 Neutral	$6.90B	11.12	2.92%	3.89%	2.68%	-25.06%
CANG	58 Neutral	$472.21M	6.63	0.12%	―	40.31%	-204.86%
UXIN	40 Underperform	$770.74M	―	260.24%	―	9.33%	50.69%

OPENLANE Corporate Events

OPENLANE Expands Canadian Receivables Purchase Agreement

On May 23, 2025, OPENLANE, Inc., through its subsidiary Automotive Finance Canada Inc. (AFCI), amended its Canadian Receivables Purchase Agreement to increase the program limit from C$300 million to C$375 million. This amendment, involving major financial institutions like Computershare Trust Company of Canada and Royal Bank of Canada, signifies a strategic move by OPENLANE to enhance its financial capacity, potentially impacting its operations and market positioning positively.

The most recent analyst rating on (KAR) stock is a Buy with a $25.00 price target. To see the full list of analyst forecasts on OPENLANE stock, see the KAR Stock Forecast page.

OPENLANE Appoints New CFO to Drive Growth

On April 22, 2025, OPENLANE, Inc. announced the appointment of Bradley Herring as Executive Vice President and Chief Financial Officer, effective May 27, 2025. Herring, who brings over 30 years of experience in financial operations and investor relations, will lead all financial and investor-facing functions at OPENLANE. His appointment is expected to enhance the company’s financial strategy and support its vision to lead the digital transformation of the wholesale used vehicle market. This strategic move is anticipated to strengthen OPENLANE’s market position and deliver growth and value to its customers and shareholders.