HomeEquities ScoreHere is why KAR Auction Services Inc (KAR) stock faced negativity on...

Here is why KAR Auction Services Inc (KAR) stock faced negativity on Monday?

KAR Auction Services Inc. (KAR) declined 3.05% in after-hours on Monday, September 20, 2021, and closed the daily trading at $15.25. Even in the regular trading session of Monday, KAR’s stock lost 2.42%. KAR shares have risen 4.52% over the last 12 months, and they have moved down 4.84% in the past week. Over the past three months, the stock has lost 12.51%, while over the past six months, it has gained2.61%.

Let’s have a brief look at its recent news.


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KAR revised financial outlook

On September 20, 2021, KAR Auction Services, Inc lowered its financial estimates due to the continued disruption caused by the chip shortage and the corresponding lack of visibility into used vehicle volumes in its marketplaces.

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The company now expecting$95 million to $100 million of Adjusted EBITDA for the third quarter of 2021 and expects approximately 2.6 million vehicles sold in 2021. The company did not provide fourth-quarter financial expectations at this time.

KAR hosting an upcoming analyst day

KAR Auction Services Inc will host a virtual Analyst Day on Tuesday, September 21, 2021, at 11:00 a.m. ET. The event is expected to conclude at 2:00 p.m. ET.

The company’s top management will provide an in-depth review of the company’s Global’s strategic direction, operating model, financial performance, and long-term roadmap.

Acquisition of CARWAVE

On August 23, 2021, KAR Auction Services Inc signed a definitive agreement to acquire CARWAVE Holdings LLC, to build KAR’s consistent growth in the dealer-to-dealer segment. The acquisition will enhance KAR’s position in the highly fragmented wholesale used vehicle market, and accelerate the company’s overall transformation to a digital marketplace company.

Participation in the recent investor conference

KAR Auction Services Inc recently participated at J.P. Morgan Auto Conference which was held on August 11, 2021. The company was presented by its CEO, Peter Kelly, and by CFO Eric Loughmiller.

KAR recent financial results announcement

On August 3, 2021, KAR Auction Services, Inc. reported its second-quarter financial results for the period ended June 30, 2021.

Q2 2021 financial highlights

  • Kar reported total revenue of 585.4 million in Q2 2021 compared to $419.0 million for the second quarter of 2020.
  • Total operating expenses were $518.8 million in Q2 2021 compared to $423.7 million in Q2 2020.
  • It earned a net income of 5 million, or $0.01 per diluted share in the second quarter of 2021, compared with a net loss of $32.3 million, or $0.27 net loss per diluted share in Q2 2020.
  • Adjusted EBITDA was $116.5 million in Q2 2021 compared with $80.0 million in Q2 2020.

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Conclusion

KAR stock plunged on Monday after the company revised its financial outlook and now expecting less revenue compared to the previously announced outlook. We hope that it will return towards positivity in the coming trading sessions.

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