CarMax (NYSE:KMX) Sets New 1-Year Low Following Weak Earnings

Key Points

• CarMax's shares fell to a new 52-week low of $43.34 after reporting weaker than expected quarterly earnings with an EPS of $0.64, missing estimates of $1.03.
• The company's revenue dropped by 6% year-over-year, totaling $6.59 billion, below the expected $7.07 billion.
• Analyst ratings vary, with only one Strong Buy, eight Buy, four Hold, and one Sell, resulting in a consensus rating of "Moderate Buy" and a price target of $81.50.

CarMax, Inc. (NYSE:KMX - Get Free Report)'s share price hit a new 52-week low during trading on Thursday after the company announced weaker than expected quarterly earnings. The company traded as low as $43.96 and last traded at $43.34, with a volume of 5492349 shares. The stock had previously closed at $57.05.

The company reported $0.64 EPS for the quarter, missing analysts' consensus estimates of $1.03 by ($0.39). CarMax had a return on equity of 9.11% and a net margin of 2.09%.The firm had revenue of $6.59 billion for the quarter, compared to analysts' expectations of $7.07 billion. During the same quarter in the previous year, the firm posted $0.85 earnings per share. The firm's revenue for the quarter was down 6.0% compared to the same quarter last year.

Analyst Upgrades and Downgrades

Several analysts recently issued reports on KMX shares. JPMorgan Chase & Co. increased their price target on CarMax from $58.00 to $65.00 and gave the company a "neutral" rating in a report on Thursday, September 18th. Truist Financial upped their target price on CarMax from $72.00 to $74.00 and gave the company a "hold" rating in a research report on Monday, June 23rd. Wedbush lowered shares of CarMax from an "outperform" rating to a "neutral" rating in a research note on Thursday. Morgan Stanley began coverage on shares of CarMax in a research note on Tuesday, July 1st. They set an "overweight" rating and a $80.00 price objective on the stock. Finally, Stephens dropped their price objective on shares of CarMax from $81.00 to $74.00 and set an "overweight" rating on the stock in a report on Monday, September 15th. One investment analyst has rated the stock with a Strong Buy rating, eight have given a Buy rating, four have given a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, the company has a consensus rating of "Moderate Buy" and a consensus price target of $81.50.

Insider Buying and Selling

In related news, EVP Jon G. Daniels sold 1,540 shares of the firm's stock in a transaction that occurred on Wednesday, July 2nd. The stock was sold at an average price of $70.64, for a total transaction of $108,785.60. Following the completion of the transaction, the executive vice president owned 2,779 shares in the company, valued at $196,308.56. This trade represents a 35.66% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. 1.70% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On CarMax

A number of institutional investors have recently modified their holdings of KMX. Zions Bancorporation National Association UT bought a new position in shares of CarMax in the first quarter worth about $27,000. CYBER HORNET ETFs LLC bought a new stake in CarMax during the 2nd quarter worth about $28,000. MUFG Securities EMEA plc bought a new stake in CarMax during the 2nd quarter worth about $30,000. Accent Capital Management LLC bought a new stake in CarMax during the 1st quarter worth about $34,000. Finally, Strengthening Families & Communities LLC raised its holdings in CarMax by 93.1% during the 1st quarter. Strengthening Families & Communities LLC now owns 531 shares of the company's stock worth $39,000 after purchasing an additional 256 shares during the last quarter.

CarMax Trading Down 24.3%

The company has a debt-to-equity ratio of 2.86, a current ratio of 2.39 and a quick ratio of 0.80. The business has a 50 day moving average of $59.28 and a 200 day moving average of $65.20. The firm has a market capitalization of $6.48 billion, a price-to-earnings ratio of 11.85, a PEG ratio of 0.94 and a beta of 1.35.

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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