OPENLANE, Inc. (NYSE:KAR) just released its latest quarterly results and things are looking bullish. The company beat forecasts, with revenue of US$460m, some 3.4% above estimates, and statutory earnings per share (EPS) coming in at US$0.18, 29% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following last week's earnings report, OPENLANE's seven analysts are forecasting 2025 revenues to be US$1.83b, approximately in line with the last 12 months. Statutory earnings per share are expected to drop 10% to US$0.56 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.80b and earnings per share (EPS) of US$0.49 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the solid gain to earnings per share expectations following these results.

View our latest analysis for OPENLANE

There's been no major changes to the consensus price target of US$23.83, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on OPENLANE, with the most bullish analyst valuing it at US$26.00 and the most bearish at US$22.00 per share. This is a very narrow spread of estimates, implying either that OPENLANE is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2025. That would be a definite improvement, given that the past five years have seen revenue shrink 2.1% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.7% annually. Although OPENLANE's revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.

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The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards OPENLANE following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$23.83, with the latest estimates not enough to have an impact on their price targets.

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 forecasts for OPENLANE going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for OPENLANE that you need to take into consideration.

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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.

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