KAR Auction Services Inc. Stock Downgraded (KAR)
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 267.1% when compared to the same quarter one year prior, rising from -$14.30 million to $23.90 million.
- The revenue growth significantly trails the industry average of 34.2%. Since the same quarter one year prior, revenues slightly increased by 3.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Commercial Services & Supplies industry and the overall market, KAR AUCTION SERVICES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Currently the debt-to-equity ratio of 1.75 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, KAR's quick ratio is somewhat strong at 1.14, demonstrating the ability to handle short-term liquidity needs.
-- Written by a member of TheStreet Ratings Staff
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