CarMax (NYSE:KMX) Shares Gap Up on Better-Than-Expected Earnings

Shares of CarMax, Inc. (NYSE:KMX - Get Free Report) gapped up prior to trading on Friday following a stronger than expected earnings report. The stock had previously closed at $64.33, but opened at $70.27. CarMax shares last traded at $67.08, with a volume of 2,898,134 shares trading hands.

The company reported $1.38 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.18 by $0.20. CarMax had a return on equity of 8.22% and a net margin of 1.90%. The company had revenue of $7.55 billion for the quarter, compared to analyst estimates of $7.58 billion. During the same quarter in the previous year, the company earned $0.97 earnings per share. The firm's quarterly revenue was up 6.1% compared to the same quarter last year.

Wall Street Analyst Weigh In

A number of analysts have issued reports on KMX shares. Royal Bank Of Canada reiterated an "underperform" rating on shares of CarMax in a research note on Monday, April 21st. Needham & Company LLC reduced their target price on shares of CarMax from $101.00 to $92.00 and set a "buy" rating on the stock in a report on Friday, April 11th. JPMorgan Chase & Co. cut their price objective on CarMax from $72.00 to $65.00 and set an "underweight" rating on the stock in a research report on Thursday, March 27th. Wedbush restated an "outperform" rating and set a $90.00 price target on shares of CarMax in a report on Wednesday. Finally, Stephens upgraded CarMax from an "equal weight" rating to an "overweight" rating and lifted their price objective for the company from $86.00 to $90.00 in a research note on Wednesday, March 26th. Three analysts have rated the stock with a sell rating, four have assigned a hold rating, seven have assigned a buy rating and one has given a strong buy rating to the company's stock. According to data from MarketBeat.com, the stock presently has an average rating of "Hold" and a consensus target price of $85.82.

Insider Activity at CarMax

In related news, Director Mitchell D. Steenrod acquired 1,300 shares of CarMax stock in a transaction dated Thursday, April 24th. The stock was acquired at an average price of $65.49 per share, for a total transaction of $85,137.00. Following the transaction, the director now owns 33,577 shares of the company's stock, valued at $2,198,957.73. This represents a 4.03% increase in their ownership of the stock. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this link. 1.70% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On CarMax

Hedge funds have recently made changes to their positions in the company. Kovitz Investment Group Partners LLC boosted its position in shares of CarMax by 348.0% in the 4th quarter. Kovitz Investment Group Partners LLC now owns 6,595,067 shares of the company's stock valued at $539,213,000 after purchasing an additional 5,122,850 shares during the period. Norges Bank purchased a new stake in CarMax in the fourth quarter valued at approximately $423,187,000. Janus Henderson Group PLC boosted its holdings in shares of CarMax by 0.6% in the fourth quarter. Janus Henderson Group PLC now owns 4,671,950 shares of the company's stock valued at $381,978,000 after acquiring an additional 29,715 shares during the period. Geode Capital Management LLC grew its position in shares of CarMax by 1.3% during the fourth quarter. Geode Capital Management LLC now owns 3,710,267 shares of the company's stock worth $302,564,000 after acquiring an additional 47,058 shares during the last quarter. Finally, Baird Financial Group Inc. grew its position in shares of CarMax by 7.1% during the first quarter. Baird Financial Group Inc. now owns 3,093,632 shares of the company's stock worth $241,056,000 after acquiring an additional 206,106 shares during the last quarter.

CarMax Stock Up 5.1%

The business's fifty day moving average price is $65.60 and its 200 day moving average price is $75.58. The firm has a market capitalization of $10.32 billion, a price-to-earnings ratio of 21.10, a PEG ratio of 1.07 and a beta of 1.38. The company has a current ratio of 2.31, a quick ratio of 0.52 and a debt-to-equity ratio of 2.91.

About CarMax

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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