ROGERS, Ark. – America's Car-Mart, Inc. (NASDAQ:CRMT) has announced a definitive agreement to purchase the dealership assets of Texas Auto Center (TAC), a move that will expand its operations into the Texas market. The deal, set to close in the first quarter of Car-Mart's 2025 fiscal year, aligns with the company's growth strategy and focuses on enhancing customer service and shareholder value.
Founded in 1995 by Bob and Erika Blankenship, TAC has established itself as a reputable dealership group with locations in Austin and San Marcos, Texas. The acquisition is seen as a strategic fit, with Car-Mart's President and CEO, Douglas Campbell, highlighting the cultural and values alignment between the two entities.
Bob Blankenship expressed enthusiasm for the merger, emphasizing the shared commitment to quality service and the goal of continuing to meet customer needs for generations. Vickie Judy, Car-Mart's CFO, stated that the acquisition is a testament to the company's commitment to growth through acquisitions, which are intended to be accretive to revenue.
America's Car-Mart operates in twelve states and is one of the largest publicly held automotive retailers in the U.S. that focuses on the Integrated Auto Sales and Finance segment of the used car market.
This announcement is based on a press release statement.
InvestingPro Insights
In light of America's Car-Mart's recent acquisition announcement, investors may be keen to understand the financial health and market performance of the company. According to InvestingPro data, Car-Mart currently holds a market capitalization of $370.42 million. Despite a challenging market, the company has managed to maintain a revenue growth of 4.47% over the last twelve months as of Q3 2024. However, it's important to note that the company is trading at a P/E ratio of -12.79, reflecting some investor skepticism about its earnings potential.
InvestingPro Tips suggest that Car-Mart operates with a significant debt burden and has been quickly burning through cash. This could be a concern for investors considering the company's plans for expansion and acquisition. Additionally, Car-Mart has been suffering from weak gross profit margins, which stood at 14.47% over the last twelve months as of Q3 2024. These financial challenges may impact the company's ability to capitalize on its recent acquisition and could affect future profitability.
For investors seeking a deeper dive into the company's financials and market predictions, there are additional InvestingPro Tips available at https://www.investing.com/pro/CRMT. These tips provide a more comprehensive analysis of Car-Mart's financial position and market outlook. Interested readers can also take advantage of a special offer by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes access to a total of 13 InvestingPro Tips for America's Car-Mart.
With the company's next earnings date approaching on May 20, 2024, stakeholders will be watching closely to see if the strategic acquisition of Texas Auto Center will bolster Car-Mart's market presence and contribute positively to its financial trajectory.
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