The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how America's Car-Mart (NASDAQ:CRMT) and the rest of the vehicle retailer stocks fared in Q2.
Buying a vehicle is a big decision and usually the second-largest purchase behind a home for many people, so retailers that sell new and used cars try to offer selection, convenience, and customer service to shoppers. While there is online competition, especially for research and discovery, the vehicle sales market is still very fragmented and localized given the magnitude of the purchase and the logistical costs associated with moving cars over long distances. At the end of the day, a large swath of the population relies on cars to get from point A to point B, and vehicle sellers are acutely aware of this need.
The 4 vehicle retailer stocks we track reported a slower Q2. As a group, revenues missed analysts’ consensus estimates by 0.8%.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation, and while some vehicle retailer stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2% since the latest earnings results.
Weakest Q2: America's Car-Mart (NASDAQ:CRMT) With a strong presence in the Southern and Central US, America’s Car-Mart (NASDAQ:CRMT) sells used cars to budget-conscious consumers.
America's Car-Mart reported revenues of $347.8 million, down 4.9% year on year. This print exceeded analysts’ expectations by 1.2%. Despite the top-line beat, it was still a softer quarter for the company with a miss of analysts’ gross margin and earnings estimates.
America's Car-Mart scored the biggest analyst estimates beat of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock currently trades at $276.20.
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Best Q2: Lithia (NYSE:LAD) With a strong presence in the Western US, Lithia Motors (NYSE:LAD) sells a wide range of vehicles, including new and used cars, trucks, SUVs, and luxury vehicles from various manufacturers.
Lithia reported revenues of $9.23 billion, up 13.8% year on year, in line with analysts’ expectations. The business had a strong quarter with a decent beat of analysts’ earnings and gross margin estimates.
Lithia pulled off the fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $276.20.
Camping World (NYSE:NYSE:CWH) Founded in 1966 as a single recreational vehicle (RV) dealership, Camping World (NYSE:CWH) still sells RVs along with boats and general merchandise for outdoor activities.
Camping World reported revenues of $1.81 billion, down 5% year on year, falling short of analysts’ expectations by 3.1%. It was a softer quarter as it posted a miss of analysts’ earnings estimates.
Camping World delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 4.9% since the results and currently trades at $21.73.
CarMax (NYSE:NYSE:KMX) Known for its transparent, customer-centric approach and wide selection of vehicles, Carmax (NYSE:KMX) is the largest automotive retailer in the United States.
CarMax reported revenues of $7.11 billion, down 7.5% year on year. This number was in line with analysts’ expectations. Overall, it was a satisfactory quarter as it also recorded a solid beat of analysts’ gross margin estimates.
CarMax had the slowest revenue growth among its peers. The stock is up 13% since reporting and currently trades at $80.63.
This content was originally published on Stock Story
