CarMax (NYSE:KMX) Reaches New 52-Week Low - What's Next?

Key Points

• CarMax shares have reached a new 52-week low of $42.53 as analysts downgrade their ratings and price targets, with JPMorgan cutting it from $65.00 to $50.00.
• The company reported a quarterly EPS of $0.64, missing estimates of $1.03, and revenue of $6.59 billion, down 6% year-over-year.
• Institutional investors are making significant adjustments to their stakes in CarMax, with AQR Capital increasing its stake by 195.3% in the second quarter.

CarMax, Inc. (NYSE:KMX - Get Free Report) shares reached a new 52-week low during trading on Friday . The stock traded as low as $42.73 and last traded at $42.53, with a volume of 923464 shares changing hands. The stock had previously closed at $43.27.

Wall Street Analysts Forecast Growth

Several brokerages recently weighed in on KMX. Evercore ISI restated an "in-line" rating and issued a $52.00 price objective (down from $80.00) on shares of CarMax in a report on Friday, September 26th. Truist Financial cut their price objective on shares of CarMax from $74.00 to $47.00 and set a "hold" rating on the stock in a report on Friday, September 26th. Weiss Ratings restated a "sell (d)" rating on shares of CarMax in a report on Tuesday. Wall Street Zen lowered shares of CarMax from a "hold" rating to a "sell" rating in a report on Friday, October 3rd. Finally, JPMorgan Chase & Co. cut their price objective on shares of CarMax from $65.00 to $50.00 and set a "neutral" rating on the stock in a report on Friday, September 26th. One equities research analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating, eight have issued a Hold rating and three have given a Sell rating to the company. According to MarketBeat, CarMax currently has a consensus rating of "Hold" and a consensus price target of $51.75.

CarMax Stock Down 1.2%

The firm has a market capitalization of $6.28 billion, a P/E ratio of 12.55, a PEG ratio of 0.85 and a beta of 1.27. The firm's 50-day moving average is $54.71 and its 200 day moving average is $62.09. The company has a debt-to-equity ratio of 2.87, a quick ratio of 1.06 and a current ratio of 2.46.

CarMax (NYSE:KMX - Get Free Report) last posted its quarterly earnings data on Thursday, September 25th. The company reported $0.64 EPS for the quarter, missing the consensus estimate of $1.03 by ($0.39). The company had revenue of $6.59 billion during the quarter, compared to the consensus estimate of $7.07 billion. CarMax had a net margin of 1.98% and a return on equity of 8.51%. The company's revenue was down 6.0% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.85 earnings per share. As a group, equities research analysts predict that CarMax, Inc. will post 3.23 EPS for the current fiscal year.

Hedge Funds Weigh In On CarMax

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. AQR Capital Management LLC lifted its stake in CarMax by 195.3% in the 2nd quarter. AQR Capital Management LLC now owns 4,457,340 shares of the company's stock valued at $298,107,000 after purchasing an additional 2,947,996 shares during the last quarter. Baird Financial Group Inc. lifted its stake in CarMax by 6.6% in the 2nd quarter. Baird Financial Group Inc. now owns 3,298,113 shares of the company's stock valued at $221,666,000 after purchasing an additional 204,481 shares during the last quarter. Norges Bank bought a new position in CarMax in the 2nd quarter valued at approximately $208,144,000. Invesco Ltd. lifted its stake in CarMax by 4.7% in the 2nd quarter. Invesco Ltd. now owns 2,998,928 shares of the company's stock valued at $201,558,000 after purchasing an additional 135,334 shares during the last quarter. Finally, First Pacific Advisors LP lifted its stake in CarMax by 0.6% in the 2nd quarter. First Pacific Advisors LP now owns 2,431,244 shares of the company's stock valued at $163,404,000 after purchasing an additional 15,270 shares during the last quarter.

CarMax Company Profile

CarMax, Inc, through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. It operates in two segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; used vehicle auctions; extended protection plans to customers at the time of sale; and reconditioning and vehicle repair services.

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