What do you think about their skyrocketing interest expense? They used to spend about $7M in interest expenses in a year. Currently, they spent that amount in a quarter and I wouldn't be surprised if it goes up even more.
A lot of their growth has been financed with debt in the last 2 years. They had ~$230M of debt in 2021 and now it's ov…
What do you think about their skyrocketing interest expense? They used to spend about $7M in interest expenses in a year. Currently, they spent that amount in a quarter and I wouldn't be surprised if it goes up even more.
A lot of their growth has been financed with debt in the last 2 years. They had ~$230M of debt in 2021 and now it's over $500M. So, they are being hit from both sides: more debt and higher interest rates.
I think it's something you might have missed in your analysis of the latest results.
What do you think about their skyrocketing interest expense? They used to spend about $7M in interest expenses in a year. Currently, they spent that amount in a quarter and I wouldn't be surprised if it goes up even more.
A lot of their growth has been financed with debt in the last 2 years. They had ~$230M of debt in 2021 and now it's over $500M. So, they are being hit from both sides: more debt and higher interest rates.
I think it's something you might have missed in your analysis of the latest results.
I did mention the increase in debt in the original profile, along with the new securitizations: https://rationalreflections.substack.com/p/americas-car-mart
I agree that this is a potential issue and something that needs to be monitored.