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 Q1.
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 very strong Q1. As a group, revenues beat analysts’ consensus estimates by 1.1%.
Thankfully, share prices of the companies have been resilient as they are up 8.7% on average since the latest earnings results.
Best Q1: 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 $370.2 million, up 1.9% year on year. This print exceeded analysts’ expectations by 7.8%. Overall, it was an incredible quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
America's Car-Mart scored the biggest analyst estimates beat but had the slowest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 11% since reporting and currently trades at $51.41.
Is now the time to buy America's Car-Mart? Access our full analysis of the earnings results here, it’s free.
Camping World (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 $1.41 billion, up 3.6% year on year, falling short of analysts’ expectations by 1%. However, the business still had a very strong quarter with a solid beat of analysts’ EBITDA and EPS estimates.
The market seems happy with the results as the stock is up 27% since reporting. It currently trades at $17.90.
Is now the time to buy Camping World? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $9.18 billion, up 7.2% year on year, falling short of analysts’ expectations by 2.1%. Still, it was a satisfactory quarter as it posted a solid beat of analysts’ EBITDA estimates.
Lithia delivered the fastest revenue growth but had the weakest performance against analyst estimates in the group. Interestingly, the stock is up 12% since the results and currently trades at $332.19.
Read our full analysis of Lithia’s results here.
CarMax (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 $7.55 billion, up 6.1% year on year. This result was in line with analysts’ expectations. It was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ gross margin estimates.
The stock is up 6.9% since reporting and currently trades at $68.75.
Read our full, actionable report on CarMax here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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