CarMax (KMX) closed at $71.81 in the latest trading session, marking a -0.55% move from the prior day. This move lagged the S&P 500's daily gain of 0.99%.
Coming into today, shares of the used car dealership chain had gained 2.18% in the past month. In that same time, the Retail-Wholesale sector lost 0.04%, while the S&P 500 gained 0.42%.
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 $0.15 per share, which would represent a year-over-year decline of 90.38%. Meanwhile, our latest consensus estimate is calling for revenue of $7.23 billion, down 22.31% from the prior-year quarter.
KMX's full-year Zacks Consensus Estimates are calling for earnings of $2.27 per share and revenue of $26.72 billion. These results would represent year-over-year changes of -25.08% and -10%, respectively.
Investors should also note any recent changes to analyst estimates for CarMax. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 1.39% lower. CarMax currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that CarMax has a Forward P/E ratio of 31.78 right now. This represents a premium compared to its industry's average Forward P/E of 24.33.
We can also see that KMX currently has a PEG ratio of 2.12. 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. KMX's industry had an average PEG ratio of 1.72 as of yesterday's close.
The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 75, putting it in the top 30% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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