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America's Car-Mart Shares Rev As Buckingham Takes Bullish Stance

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America's Car-Mart Shares Rev As Buckingham Takes Bullish Stance

Buckingham Research Group started coverage of America’s Car-Mart, Inc. (NASDAQ: CRMT) — the “Buy Here, Pay Here” used car dealership chain — with a chirp of the tires Thursday. 

The Analyst

Buckingham’s Hugh Miller initiated coverage of America’s Car-Mart with a Buy rating and $103 target price.

The Thesis

Buckingham views Car-Mart as an “attractive franchise” that could deliver 15-percent average EPS growth in 2020 and 2021, and one that has some recession-proof qualities, Miller said in the Thursday initiation note. 

Car-Mart management takes a slow, disciplined approach to dealership growth, the analyst said, adding that he sees per-store revenue growing with help of the company’s rollout of an online credit application and new online inventory catalog. 

Declining credit costs could also boost the chain, Miller said. 

The company’s target market — low-credit score customers — is shrinking, which has sharpened competition for subprime and nonprime financing, the analyst said.  

Car-Mart's relatively small portfolio size positions it for healthy growth despite industry headwinds, Miller said.

“Importantly, we believe CRMT is able to achieve our growth outlook via internal funding sources, placing the company at an advantage to capitalize on an eventual recession, as its peers tend be heavily dependent on the asset backed securities market." 

Price Action

America’s Car-Mart shares were surging 9.94 percent to $93.23 at the time of publication Thursday. 

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Latest Ratings for CRMT

DateFirmActionFromTo
Aug 2019MaintainsBuy
Mar 2019Initiates Coverage OnBuy
Sep 2018MaintainsBuyBuy

View More Analyst Ratings for CRMT
View the Latest Analyst Ratings

Posted-In: Buckingham Research Group Hugh MillerAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

 

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