Macroaxis Stories

Do analysts have more confidence in Americas Car (USA Stocks:CRMT) in March?

March 8, 2024  By Gabriel Shpitalnik
Macroaxis Story
The road to riches is often paved with uncertainty, and America's Car Mart (CRMT) is no exception. Despite being in the Consumer Cyclical sector and the Auto & Truck Dealerships industry, the company has shown a negative income from continuing operations of $20.4M and a net interest income loss of $38.3M. The company's profit margin is also in the red at -0.01, indicating a loss. However, it's not all gloom and doom. The company's quarterly revenue growth stands at 0.028, and it has a potential upside of 5.47. The naive expected forecast value is $63.91, while the valuation real value is $72.98, suggesting some room for growth. However, with a high short percent of 0.3046 and 1.2M shares short, there is significant bearish sentiment in the market. The company's total risk alpha of -1.0 and a standard deviation of 4.51 also indicate a high level of risk. Therefore, while there may be potential for America's Car Mart to skyrocket in April, investors should proceed with caution. Americas Car-Mart is set to release its earnings report today, with the subsequent financial statement anticipated on May 22, 2024. Given the growing interest in the specialty retail sector, it's worthwhile to examine Americas Car-Mart more closely. We'll discuss why, considering the latest economic forecast, the company still has the potential to yield above-average margins.
Published over six months ago
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Reviewed by Vlad Skutelnik

Given America's Car Mart's (USA Stocks: CRMT) total revenue of $1.4B and a net income of $20.4M, the company shows potential for growth. However, investors should be cautious due to its negative return on equity of 0.04 and a net interest income loss of $38.3M, which could impact the stock's performance in April.

Primary Takeaways

Americas Car Mart currently has liabilities amounting to $638.6 million. Its Debt to Equity (D/E) ratio stands at 1.2, which is roughly average when compared to similar companies.
What is the right price you would pay to acquire a share of Americas Car? For most investors, it would be the price that gives them a wide margin of safety to have minimal downside risk. In other words, most investors are always looking for undervalued stocks. Even if the future performance is not entirely as expected, the loss of holding it is minimized, and the downside risk is negated. Please read more on our stock advisor page.

What is happening with Americas Car Mart this year

Annual and quarterly reports issued by Americas Car Mart are formal financial statements that are published yearly and quarterly and sent to Americas stockholders. The reports show and break down the current year's ongoing operations and discuss plans for the upcoming year. Annual reports have been a requirement from the Securities and Exchange Commission (SEC) for businesses owned by the public since 1934.
Companies such as Americas Car often view their annual report as an effective marketing tool to disseminate their perspective on company future earnings or innovations. With this in mind, many companies devote large sums of money to making their reports attractive and informative. In such instances, the annual report becomes a forum through which a company can communicate to the general public any number of topics that may or may not be directly related to the actual data published in the reports.

How important is Americas Car's Liquidity

Americas Car financial leverage refers to using borrowed capital as a funding source to finance Americas Car Mart ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Americas Car financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Americas Car's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Americas Car's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Americas Car's total debt and its cash.

Americas Car Gross Profit

Americas Car Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Americas Car previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Americas Car Gross Profit growth over the last 10 years. Please check Americas Car's gross profit and other fundamental indicators for more details.

Is Americas a risky opportunity?

Let's check the volatility. Americas is looking slightly risky at this time. Whether you invest your money or manage your clients' funds, remember that it is easy to forget that behind Americas (USA Stocks:CRMT) stock is an actual business venture. So, do not let stock picking become an abstract concept by ignoring the elementary risk calculations. acquiring a share of an Americas Car stock makes you a part-owner of that company.

Americas Car Mart Current Consensus

Here is the newest trade recommendation based on an ongoing consensus estimate among financial analysis covering Americas Car-Mart. The Americas consensus assessment is calculated by taking the average estimates from all of the analysts covering Americas Car.
Hold
2		Sell
1
Strong Buy00.0
Buy00.0
Hold266.67
Sell133.33
Strong Sell00.0
As Warren Buffet wisely said, be fearful when others are greedy and greedy when others are fearful. America's Car Mart (CRMT) is currently trading at a Price to Earnings ratio of 7.00X, significantly lower than the industry average, suggesting that the stock may be undervalued. However, with a high probability of bankruptcy at 31.64%, investors should approach with caution. The company's current ratio of 16.86X indicates a strong ability to meet short-term obligations, which is a positive sign. However, the negative operating margin and return on equity suggest underlying operational and profitability issues. Therefore, while there may be potential for growth in April, investors should carefully consider the associated risks.

Can Americas Car build up on the newest gain?

Americas Car Mart's recent standard deviation of 4.51 indicates a high level of volatility, suggesting a wider range of stock prices and potential for rapid change. This could be an opportunity for high-risk tolerance investors, but a cautionary sign for those seeking stability. The stock's future gains largely depend on market conditions and individual investor risk tolerance. Americas Car Mart's low volatility, with a skewness of -0.54 and kurtosis of 3.97, requires further analysis of technical indicators to ensure reliable market information. Understanding market volatility trends can help investors time the market. Volatility indicators can measure Americas Car Mart's stock risk against market volatility during bullish and bearish trends.
The increased volatility of bear markets can impact Americas Car Mart's stock price and stress investors, often prompting portfolio rebalancing with different stocks as prices fall. In conclusion, investing in Americas Car Mart Stock (USA Stocks:CRMT) presents a potentially lucrative opportunity for investors. The stock has an analyst target price estimated value of $92, significantly higher than its current market value of $62.3. Although the analyst overall consensus is a 'hold' with 2 holds and 1 sell, the possible upside price of $67.82 indicates room for growth. However, investors should be mindful of the possible downside price of $60 and the fiscal year end in April, which could bring about market volatility. Therefore, while the prospects for Americas Car Mart Stock look promising, investors are advised to proceed with caution and conduct thorough due diligence. .

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Editorial Staff

Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies. View Profile
This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Americas Car Mart. Please refer to our Terms of Use for any information regarding our disclosure principles.

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