America’s Car-Mart: Financials and Valuations Support Stock Uptrend

America's Car-Mart

America’s Car-Mart, Inc. (NASDAQ:CRMT) stock price rallied at a robust pace in the last twelve months. Its shares rose 35% in the past six months, up 60% over the previous twelve months. The stock has hit an all-time high of $64 today after its revenue of $169 million in the fourth quarter topped analysts’ estimate by $10 million while earning also exceeded the consensus estimate by $0.45 per share.

America's Car-Mart

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The company operates 139 automotive dealerships in eleven states, and it is one of the leading automotive retailers in the United States.

Its CEO said, “We are pleased to report another good, solid quarter and we are excited about the opportunities we have to continue to improve the business as we move forward.”

Combined with sales growth, the company has highlighted improvements in its operating expenses, earnings and growth initiatives. Its costs reduced to 16.9% of sales in the latest quarter compared to 17.2% in the year-ago period. This represents effective management and effective cost-cutting strategies.

America’s Car-Mart earnings per share stood at around 1.43 per share in the fourth quarter, higher from $0.66 per share in the same period last year. Full-year earnings stood around $4.90 per share in fiscal 2018.

Valuations and Share Buybacks

America's Car-Mart

America’s Car-Mart valuations are hovering below the industry average. CRMT stock trades at around 12 times to earnings and 1.49 times book ratio when the average industry trades in the range of 20 times to earnings and three times to book ratio.

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Solid year over year sales and earnings growth supports its valuations despite a sharp share price rally in the last twelve months.

Its stock has also been receiving support from a share repurchase program – which always has a positive impact on earning and share price performance. America’s Car-Mart repurchased almost 5.8 million outstanding shares last year, and it plans to accelerate the buybacks into this year.

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