A week ago, America's Car-Mart, Inc. (NASDAQ:CRMT) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 15% higher than the analysts had forecast, at US$326m, while EPS were US$0.37 beating analyst models by 140%. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for America's Car-Mart

Following the latest results, America's Car-Mart's four analysts are now forecasting revenues of US$1.44b in 2026. This would be an okay 4.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 290% to US$3.63. Before this earnings report, the analysts had been forecasting revenues of US$1.36b and earnings per share (EPS) of US$3.47 in 2026. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Despite these upgrades,the analysts have not made any major changes to their price target of US$52.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic America's Car-Mart analyst has a price target of US$65.00 per share, while the most pessimistic values it at US$45.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that America's Car-Mart's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 3.2% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.0% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than America's Car-Mart.

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 America's Car-Mart following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at US$52.00, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on America's Car-Mart. Long-term earnings power is much more important than next year's profits. We have forecasts for America's Car-Mart going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with America's Car-Mart (at least 1 which is a bit unpleasant) , and understanding these should be part of your investment process.

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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.