Fact based stock research
KAR Auction Services (NYSE:KAR)
US48238T1097
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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
KAR Auction Services stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 75 (better than 75% compared with investment alternatives), KAR Auction Services (Diversified Support Services, USA) shares have much better financial characteristics than comparable stocks. Shares of KAR Auction Services are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives). But they show above-average growth (Growth Rank of 51) and are safely financed (Safety Rank of 77, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 75, is a strong buy recommendation based on KAR Auction Services's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company KAR Auction Services exhibits low value (Obermatt Value Rank of 49), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 51). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 77) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | USA |
| Industry | Diversified Support Services |
| Index | S&P MIDCAP |
| Size class | Large |
25-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: KAR Auction Services
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 82 |
|
53 |
|
55 |
|
49 |
|
| GROWTH | ||||||||
| GROWTH | 21 |
|
83 |
|
79 |
|
51 |
|
| SAFETY | ||||||||
| SAFETY | 41 |
|
63 |
|
77 |
|
77 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
9 |
|
25 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
55 |
|
67 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 75 (better than 75% compared with investment alternatives), KAR Auction Services (Diversified Support Services, USA) shares have much better financial characteristics than comparable stocks. Shares of KAR Auction Services are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives). But they show above-average growth (Growth Rank of 51) and are safely financed (Safety Rank of 77, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 75, is a strong buy recommendation based on KAR Auction Services's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company KAR Auction Services exhibits low value (Obermatt Value Rank of 49), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 51). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 77) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 82 |
|
53 |
|
55 |
|
49 |
|
| GROWTH | ||||||||
| GROWTH | 21 |
|
83 |
|
79 |
|
51 |
|
| SAFETY | ||||||||
| SAFETY | 41 |
|
63 |
|
77 |
|
77 |
|
| COMBINED | ||||||||
| COMBINED | 50 |
|
78 |
|
93 |
|
75 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), KAR Auction Services shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for KAR Auction Services. Price-to-Sales (P/S) is 55, which means that the stock price compared with what market professionals expect for future sales is lower than for 55% of comparable companies, indicating a good value regarding KAR Auction Services's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 51% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 78. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than KAR Auction Services (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on KAR Auction Services's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 94 |
|
63 |
|
59 |
|
55 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 60 |
|
49 |
|
48 |
|
51 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 90 |
|
86 |
|
92 |
|
78 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 82 |
|
53 |
|
55 |
|
49 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 51 (better than 51% compared with alternatives), KAR Auction Services shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for KAR Auction Services. Only Capital Growth has a good rank of 77, which means that currently professionals expect the company to grow its invested capital more than 32% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 48 which means that currently professionals expect the company to grow less than 52% of its competitors. Profit Growth with a rank of 32 and Stock Returns with a rank of 45 are also low (below 55% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 51, is a buy recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for KAR Auction Services is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 9 |
|
47 |
|
49 |
|
48 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 81 |
|
79 |
|
86 |
|
32 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
85 |
|
85 |
|
77 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 60 |
|
31 |
|
49 |
|
45 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 21 |
|
83 |
|
79 |
|
51 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 77 (better than 77% compared with alternatives) for 2024, the company KAR Auction Services has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of KAR Auction Services is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for KAR Auction Services.Leverage is at 86, meaning the company has a below-average debt-to-equity ratio. It has less debt than 86% of its competitors.Refinancing is at a rank of 70, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 70% of its competitors. Liquidity is at 23, meaning that the company generates less profit to service its debt than 77% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 77 (better than 77% compared with alternatives), KAR Auction Services has a financing structure that is significantly safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for KAR Auction Services more challenging. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 2 |
|
48 |
|
82 |
|
86 |
|
| REFINANCING | ||||||||
| REFINANCING | 100 |
|
94 |
|
86 |
|
70 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 33 |
|
30 |
|
19 |
|
23 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 41 |
|
63 |
|
77 |
|
77 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
24 |
|
18 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
50 |
|
72 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
35 |
|
62 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
10 |
|
11 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
9 |
|
25 |
|
new |
|
Stock analysis by the purely fact based Obermatt Method for KAR Auction Services from April 25, 2024.
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