Yahoo Finance CarMax (KMX) Outpaces Stock Market Gains: What You Should Know
CarMax (KMX) closed the most recent trading day at $72.21, moving +0.64% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.02%. At the same time, the Dow lost 0.42%, and the tech-heavy Nasdaq gained 2.7%.
Prior to today's trading, shares of the used car dealership chain had gained 3.74% over the past month. This has outpaced the Retail-Wholesale sector's gain of 1.85% and the S&P 500's gain of 1.07% in that time.
Investors will be hoping for strength from CarMax as it approaches its next earnings release. On that day, CarMax is projected to report earnings of $0.73 per share, which would represent a year-over-year decline of 53.21%. Meanwhile, our latest consensus estimate is calling for revenue of $7.2 billion, down 22.7% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.28 per share and revenue of $26.72 billion, which would represent changes of -24.75% and -10%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for CarMax. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 4.69% lower. CarMax is currently a Zacks Rank #3 (Hold).
Digging into valuation, CarMax currently has a Forward P/E ratio of 31.51. For comparison, its industry has an average Forward P/E of 25.7, which means CarMax is trading at a premium to the group.
Also, we should mention that KMX has a PEG ratio of 1.72. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Automotive - Retail and Wholesale - Parts industry currently had an average PEG ratio of 1.77 as of yesterday's close.
The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 81, which puts it in the top 33% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow KMX in the coming trading sessions, be sure to utilize Zacks.com.
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CarMax, Inc. (KMX) : Free Stock Analysis Report
