This story originally appeared on Zacks
In the latest trading session, CarMax (KMX) closed at $107.48, marking a -1.92% move from the previous day. This move was narrower than the S&P 500’s daily loss of 2.12%. Elsewhere, the Dow lost 1.78%, while the tech-heavy Nasdaq added 0.45%.
Coming into today, shares of the used car dealership chain had gained 1.81% in the past month. In that same time, the Retail-Wholesale sector lost 2.89%, while the S&P 500 lost 3.91%.
CarMax will be looking to display strength as it nears its next earnings release. On that day, CarMax is projected to report earnings of $1.42 per share, which would represent year-over-year growth of 11.81%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.86 billion, up 52.21% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.40 per share and revenue of $31.85 billion. These totals would mark changes of +63.72% and +68.06%, respectively, from last year.
Any recent changes to analyst estimates for CarMax should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Within the past 30 days, our consensus EPS projection has moved 0.38% lower. CarMax currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, CarMax is holding a Forward P/E ratio of 14.81. This valuation marks a discount compared to its industry’s average Forward P/E of 17.19.
Meanwhile, KMX’s PEG ratio is currently 0.93. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Automotive – Retail and Wholesale – Parts industry currently had an average PEG ratio of 1.42 as of yesterday’s close.
The Automotive – Retail and Wholesale – Parts industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 104, which puts it in the top 41% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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CarMax, Inc. (KMX): Free Stock Analysis Report
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