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Shares of Kar Auction Services sank almost 16% in Tuesday’s extended market session as the provider of used car auction services disappointed investors with reporting a loss in the fourth quarter. The company incurred a 4Q loss of $0.21 per diluted share, while analysts had been expecting earnings per share (EPS) of $0.28. Revenues plunged 21.1% to $529.6 million year-on-year, falling short of consensus estimates of $571.9 million. Kar Auction Services’ (KAR) results were significantly affected by the restrictions COVID-19 pandemic. KAR stated, “…the potential impact that COVID-19 could have on our business remains uncertain. The broader implications for our business and results of operations remain uncertain and will depend on many factors outside our control…” “Even after the COVID-19 outbreak has subsided, we may continue to experience materially adverse impacts to our business as a result of its impact,” the company added. In FY21, the company expects net income of $90 million on adjusted EBITDA of $475 million. KAR forecasted an operating adjusted net income of $0.87 per share for this year. (See Kar Auction Services stock analysis on TipRanks) Ahead of the 4Q earnings, Barrington Research analyst Gary Prestopino reiterated a Buy rating and a price target of $25 on the stock. “We remain confident that the wholesale vehicle marketplace is resilient and will eventually return to levels of activity prior to the pandemic,” Prestopino wrote in a note to investors. Prestopino added, “ADESA [KAR’s business segment] has a strong supply of commercial vehicles at its auction locations, repossession activity should recommence in 2021, while the return of off-lease vehicles will be an important contributor to the wholesale auction industry with strong lease returns scheduled for the next two-and-a-half years. The impact of COVID-19 could drive more vehicle ownership in lieu of ride sharing or public transportation.” The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 1 analyst recommending a Buy and 1 analyst a Hold. The average analyst price target of $25 implies 35.4% upside potential to current levels. Related News: Palantir Drops 8.6% After Surprise Quarterly Loss EBay Says UK Regulator Raises Concern Over $9.2B Adevinta Deal ACI Teams Up With Auriga For Self-Service Banking Platform; Street Says Buy More recent articles from Smarter Analyst: Hexo Snaps Up Zenabis Global For C$235M; Shares Pop 22% Cornerstone Pops 16% After-Hours As Quarterly Earnings Blow Past Analysts’ Estimates Analog Devices Ramps Up Dividend By 11%; Street Is Bullish Sabre Incurs 4Q Loss As COVID-19 Hurts Sales

CARMEL, Ind. (AP) _ KAR Auction Services Inc. (KAR) on Tuesday reported a fourth-quarter...

KAR Auction Services Inc.'s (KAR) charts portray a positive picture, writes technical analyst Bruce Kamich, who says the provider of car auction services looks like it is worth buying on a dip....KAR