CarMax (NYSE:KMX) Sets New 1-Year High - Here's Why

Key Points

• CarMax shares reached a new 52-week high of $62.99, trading near $62.76 and up from the prior close of $61.05.
• Analyst sentiment remains mixed but has improved, with several firms raising price targets or upgrading the stock; however, the consensus rating is still “Hold” with an average target of $51.00.
• CarMax exceeded quarterly expectations, reporting $1.31 EPS versus $0.96 expected and $8.01 billion in revenue versus $7.42 billion projected. Insiders also bought $735,574 worth of shares over the past 90 days, while major institutional investors expanded or initiated positions.

CarMax, Inc. (NYSE:KMX - Get Free Report) shares hit a new 52-week high on Friday . The stock traded as high as $62.99 and last traded at $62.76, with a volume of 361781 shares. The stock had previously closed at $61.05.

Analysts Set New Price Targets

A number of research analysts have issued reports on KMX shares. Mizuho increased their target price on shares of CarMax from $38.00 to $43.00 and gave the company a "neutral" rating in a report on Thursday, June 18th. Wall Street Zen raised CarMax from a "sell" rating to a "hold" rating in a research note on Saturday, June 13th. JPMorgan Chase & Co. upgraded CarMax from an "underweight" rating to a "neutral" rating and upped their price target for the stock from $38.00 to $60.00 in a report on Wednesday, July 29th. Zacks Research raised CarMax from a "hold" rating to a "strong-buy" rating in a research note on Tuesday, August 11th. Finally, UBS Group set a $60.00 price objective on CarMax in a report on Wednesday, July 29th. One investment analyst has rated the stock with a Strong Buy rating, two have given a Buy rating, fourteen have given a Hold rating and three have issued a Sell rating to the stock. According to MarketBeat.com, CarMax currently has a consensus rating of "Hold" and an average target price of $51.00.

CarMax Price Performance

The company has a debt-to-equity ratio of 2.87, a quick ratio of 0.82 and a current ratio of 2.70. The company's fifty day simple moving average is $55.43 and its two-hundred day simple moving average is $46.88. The stock has a market capitalization of $8.82 billion, a PE ratio of 40.60, a P/E/G ratio of 2.70 and a beta of 1.15.

CarMax (NYSE:KMX - Get Free Report) last announced its quarterly earnings results on Wednesday, June 17th. The company reported $1.31 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.96 by $0.35. The company had revenue of $8.01 billion for the quarter, compared to the consensus estimate of $7.42 billion. CarMax had a net margin of 0.84% and a return on equity of 6.64%. The company's revenue for the quarter was up 6.2% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $1.38 earnings per share. As a group, sell-side analysts predict that CarMax, Inc. will post 2.73 EPS for the current year.

Insider Buying and Selling

In related news, CEO Keith Barr purchased 9,400 shares of the company's stock in a transaction on Monday, June 22nd. The stock was bought at an average price of $53.01 per share, with a total value of $498,294.00. Following the completion of the transaction, the chief executive officer owned 33,375 shares of the company's stock, valued at approximately $1,769,208.75. This represents a 39.21% increase in their position. The acquisition was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, Director Peter J. Bensen purchased 2,500 shares of the company's stock in a transaction on Monday, June 22nd. The shares were bought at an average cost of $52.20 per share, with a total value of $130,500.00. Following the transaction, the director directly owned 24,796 shares of the company's stock, valued at $1,294,351.20. This represents a 11.21% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. Insiders purchased 13,900 shares of company stock worth $735,574 in the last ninety days. Insiders own 1.01% of the company's stock.

Institutional Trading of CarMax

A number of large investors have recently made changes to their positions in KMX. SRS Investment Management LLC grew its holdings in shares of CarMax by 1,717.5% during the fourth quarter. SRS Investment Management LLC now owns 5,637,803 shares of the company's stock worth $217,845,000 after buying an additional 5,327,603 shares in the last quarter. AQR Capital Management LLC raised its position in shares of CarMax by 151.8% in the fourth quarter. AQR Capital Management LLC now owns 7,930,345 shares of the company's stock valued at $306,429,000 after buying an additional 4,780,903 shares during the last quarter. Jupiter Topco LLC purchased a new position in shares of CarMax during the second quarter valued at approximately $245,676,000. Primecap Management Co. CA purchased a new position in shares of CarMax during the second quarter valued at approximately $230,548,000. Finally, Norges Bank acquired a new stake in CarMax during the fourth quarter worth approximately $159,232,000.

About CarMax

CarMax NYSE: KMX is a leading retailer of used vehicles in the United States, offering customers a streamlined, no-haggle purchasing experience. The company's inventory spans a broad range of makes and models, each of which undergoes a comprehensive inspection process before being offered for sale. Customers can shop in person at CarMax's retail locations or browse the company's online platform, which provides detailed vehicle histories, virtual tours and contactless purchasing options.

Originally launched in 1993 as a division of Circuit City, CarMax became an independent, publicly traded company in 1997.

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