Results: OPENLANE, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

OPENLANE, Inc. (NYSE:KAR) defied analyst predictions to release its quarterly results, which were ahead of market expectations. The company beat forecasts, with revenue of US$482m, some 6.0% above estimates, and statutory earnings per share (EPS) coming in at US$0.15, 29% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, OPENLANE's eight analysts currently expect revenues in 2025 to be US$1.85b, approximately in line with the last 12 months. Statutory per share are forecast to be US$0.74, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$1.81b and earnings per share (EPS) of US$0.58 in 2025. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a very substantial lift in earnings per share in particular.

Check out our latest analysis for OPENLANE

With these upgrades, we're not surprised to see that the analysts have lifted their price target 20% to US$29.43per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values OPENLANE at US$34.00 per share, while the most bearish prices it at US$25.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.4% by the end of 2025. This indicates a significant reduction from annual growth of 3.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.6% per year. It's pretty clear that OPENLANE's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around OPENLANE's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple OPENLANE analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for OPENLANE that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.