Why America's Car-Mart Stock Crashed Today

Key Points

• America's Car-Mart was supposed to earn a profit last quarter. It reported a loss instead.

• America's Car-Mart has reported negative free cash flow for five straight years.

• 10 stocks we like better than America's Car-Mart ›

America's Car-Mart (NASDAQ: CRMT) stock got itself in a one-car pile-up this morning, falling 21.6% through 10:05 a.m. ET after reporting a big fiscal first-quarter 2026 loss -- where Wall Street had expected a profit.

Analyst forecasts had the used-car dealer earning $0.83 per share on $359.2 million in Q1, which ended July 31, but the company had to admit it lost $0.69 per share instead. Revenue also came up short at $341.3 million.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

America's Car-Mart Q1 "earnings"

Not all the news was horrible. Sales by units moved declined 5.7%, but revenue declined only 1.9% -- so pricing was strong on the cars America's Car-Mart did manage to sell in the quarter. Indeed, the average price per car sold grew 1.4% year over year. Gross profit margin also expanded 160 basis points to 36.6%, and allowances for future credit losses (i.e., bad loans) as a percentage of sales declined modestly.

Is America's Car-Mart stock a sell?

So why did America's Car-Mart end up losing money? Reviewing the income statement, it appears higher selling, general, and administrative expenses exacerbated the shortfall in sales, and provisions for credit losses in the quarter rose as well. On the bottom line, losses per share more than quadrupled year over year, which explains why investors were upset. (Well, that, plus the fact that Wall Street had promised them a profit this quarter, and Car-Mart failed to deliver).

Ultimately, what we're looking at here is a used-car dealer that, while nominally "profitable," has burned cash for five years straight and now looks likely to burn cash again for a sixth year. And it's hard to call America's Car-Mart stock a buy with a record like that.

Should you invest $1,000 in America's Car-Mart right now?

Before you buy stock in America's Car-Mart, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and America's Car-Mart wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $661,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,045,818!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 184% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 25, 2025

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.