May. 5 at 11:28 PM
Still can't fathom why
$KAR trades at 8-9x EBITDA multiple vs
$ACVA 40x ~70m 2025 EBITDA guide.
I know off lease commercial volumes a headwind for OPENLANE, but we should be at the bottom and start to trend higher in H2 and 2026/2027. Hopefully market starts to price that in, as there is serious earnings leverage in OPENLANE model.
Not sure what to expect for Q1, but it is typically 5-10% sequential growth vs Q4 ... maybe a little more this year as January and March were supposed to be very high activity months in wholesale market ... say OPENLANE grows 10% vs Q4, puts them at
$500M revs and probably 90-100M EBITDA ... full year guide set at 300M.
Beat and raise could send it ... but hard to know how bad the off lease volumes are vs dealer-to-dealer growth which theoretically should be ramping and moving online for lower fees as dealers try to manage rising cost of used cars to protect profit margins.
Would be sweet to add
$AMZN as partner to give dealers a retail channel for off lease.
