Read How Analysts Reacted To IAA's Q4 Results

Truist analyst Stephanie Moore lowered the price target on IAA Inc IAA to $50 (an upside of 40.5%) from $75 and maintained a Buy rating on the shares.
The analyst mentioned the company reported a Q4 EBITDA miss and offered "mixed" FY22 guidance on EBITDA margin, but the subsequent 22% stock price decline is "overdone."
Moore added that IAA is now trading at 11-times expected 2022-2023 EBITDA - its lowest valuation level ever.
Baird analyst Craig Kennison lowered the price target to $55 from $70 and maintained an Outperform rating on the shares.
The analyst noted the company reported strong revenue growth driven by solid volume and robust RPU; however, key profit metrics fell just short, and initial 2022 EBITDA guidance also missed the consensus forecast.
Guggenheim analyst Ali Faghri downgraded IAA to Neutral from Buy.
Barrington analyst Gary Prestopino downgraded IAA to Market Perform from Outperform without a price target post the Q4 results.
The company's 2022 guidance is less than consensus, indicating market share losses, increased purchase vehicle mix, and higher expenses, mentions Prestopino.
The analyst noted previously announced market share shifts should be completed in the first half of 2022 and will reduce total volumes by 2% in 2022.
He cited the lower than expected guidance driven by organic unit growth headwinds for the downgrade.
The company reported Q4 Adj. EPS of $0.61 (+27% year-over-year), missing the consensus of $0.62, and Sales growth of 42.9% year-over-year to $548.1 million, beating the conenose of $500.71 million.
Adjusted EBITDA increased to $140.4 million (+21.1% Y/Y).
IAA's net debt was $1.24 billion, with a Leverage Ratio at 2.3x and liquidity at $463.8 million as of January 2, 2022.
Net cash provided by operating activities stood at $311.1 million for FY21, and Free Cash Flow was $175.5 million.
The company repurchased $34 million of stock during Q4, with $366 million remaining on the authorization.
FY22 Outlook: IAA expects total revenue of $2.05 billion - $2.15 billion, versus the consensus of $1.96 billion.
It expects adjusted EBITDA of $525 million - $575 million.
Price Action: IAA shares are trading lower by 0.13% at $35.63 on the last check Monday.

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Read How Analysts Reacted To IAA's Q4 Results