CarMax (KMX) closed the most recent trading day at $79.13, moving +0.06% from the previous trading session. This change outpaced the S&P 500's 0.38% loss on the day. Meanwhile, the Dow gained 0.27%, and the Nasdaq, a tech-heavy index, lost 4.19%.
Prior to today's trading, shares of the used car dealership chain had gained 9.03% over the past month. This has outpaced the Retail-Wholesale sector's gain of 4.7% and the S&P 500's gain of 3.78% in that time.
CarMax will be looking to display strength as it nears its next earnings release, which is expected to be June 23, 2023. On that day, CarMax is projected to report earnings of $0.72 per share, which would represent a year-over-year decline of 53.85%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.23 billion, down 22.31% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.27 per share and revenue of $26.75 billion. These totals would mark changes of -25.08% and -9.9%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for CarMax. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.58% higher. CarMax is holding a Zacks Rank of #3 (Hold) right now.
Looking at its valuation, CarMax is holding a Forward P/E ratio of 34.81. This valuation marks a premium compared to its industry's average Forward P/E of 23.84.
Meanwhile, KMX's PEG ratio is currently 2.32. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Automotive - Retail and Wholesale - Parts was holding an average PEG ratio of 1.63 at yesterday's closing price.
The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 113, which puts it in the top 45% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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