While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they beli ...

In its upcoming report, CarMax (KMX) is predicted by Wall Street analysts to post quarterly earnings of $0.61 per share, reflecting an increase of 17.3% compared to the same period last year. Revenues are forecasted to be $5.99 billion, representing a year-over-year decrease of 2.6%.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted upward by 2.3% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this p ...

Core Viewpoint - CarMax (KMX) is anticipated to report a year-over-year increase in earnings despite a decline in revenues for the quarter ending November 2024, with the consensus outlook indicating a significant factor that could influence its stock price in the near term [1][2]. Earnings Expectations - The earnings report is scheduled for release on December 19, 2024, and could lead to a stock price increase if the reported figures exceed expectations; conversely, a miss could result in a decline [2]. - The consensus estimate for quarterly earnings is projected at $0.61 per share, reflecting a year-over-year increase of 17.3% [3]. - Revenues are expected to be $5.99 billion, representing a decrease of 2.6% compared to the same quarter last year [4]. Estimate Revisions - The consensus EPS estimate has been revised 2.25% higher in the last 30 days, indicating a reassessment by analysts regarding the company's earnings prospects [5]. - The Zacks Earnings ESP model suggests that the Most Accurate Estimate is lower than the consensus estimate, resulting in an Earnings ESP of -2.17%, indicating a bearish outlook from analysts [11][12]. Earnings Surprise Prediction - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with a positive Earnings ESP being a strong predictor of an earnings beat, particularly when combined with a favorable Zacks Rank [7][9]. - CarMax currently holds a Zacks Rank of 2, which complicates the prediction of an earnings beat given the negative Earnings ESP [12]. Historical Performance - In the last reported quarter, CarMax was expected to post earnings of $0.86 per share but delivered $0.85, resulting in a surprise of -1.16% [13]. - Over the past four quarters, CarMax has only beaten consensus EPS estimates once [14]. Conclusion - While CarMax does not appear to be a strong candidate for an earnings beat, investors should consider other factors when making decisions regarding the stock ahead of the earnings release [17].

RICHMOND, VA, Dec. 03, 2024 (GLOBE NEWSWIRE) -- The Golden State Valkyries and CarMax (NYSE: KMX), the nation’s largest retailer of used cars, today announced CarMax as a Founding Partner of the team and the official used car retailer of the Valkyries. The partnership will be rooted in community impact, with a dedicated focus on Bay Area youth, and will bring fans closer to the team through exclusive behind-the-scenes content and special access moments throughout the year. “CarMax has a proven focus on crea ...

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the ...

Core Insights - CarMax's stock surged by over 15.3% following its latest quarterly earnings release, indicating strong investor interest amid market divergences between used and new cars [1] - The automotive market is experiencing a shift, with used vehicle sales increasing by 5.1% while wholesale vehicle sales to dealerships declined by 0.3% [5] - CarMax's management has effectively navigated the challenging market conditions, reporting a 13.3% increase in earnings per share (EPS) despite negative industry trends [8] Financial Performance - CarMax's operating cash flows improved significantly, moving from a net outflow of $61.1 million last year to a net inflow of $501 million this year, primarily due to a $280 million decrease in inventory values [9] - The company increased its provision for loan losses to $112.6 million from $89.8 million year-over-year, reflecting worsening consumer financial conditions [7] Market Trends - The vehicle market is facing rising repossession rates, up by 23% over the year, driven by tightening financial conditions affecting consumers [5] - The personal savings rate has fallen to negative, indicating that discretionary spending may decline as consumers struggle with rising unemployment and inflation [4] Strategic Moves - CarMax has adopted a strategy of purchasing 61.4% more cars from discounted dealership inventory, positioning itself to mitigate potential losses [6] - The company allocated $106.1 million for stock buybacks, signaling management's confidence in the stock's undervaluation and potential for future price increases [10] Analyst Sentiment - Analysts at Wedbush have set a price target of $95 per share for CarMax, suggesting a potential upside of 22.1% from current trading levels [11] - Short interest in CarMax stock has decreased by over 5.8% in the past month, indicating a shift in sentiment among bearish traders [12]

Financial Performance - CarMax reported net sales and operating revenues of $7,013.5 million for the second quarter of fiscal 2025, a decrease of 0.9% compared to the same period in fiscal 2024[108]. - Gross profit for the second quarter was $760.5 million, reflecting a 9.1% increase year-over-year[108]. - For the first six months of fiscal 2025, total net sales and operating revenues decreased by 4.3% to $14,126.9 million compared to $14,760.9 million in the prior year[122]. - In the second quarter of fiscal 2025, used vehicle sales increased by 1.5% to $5,677.1 million, while wholesale vehicle sales decreased by 12.7% to $1,154.5 million[122]. - Other sales and revenues increased by 13.2% in the second quarter of fiscal 2025, driven by a 19.3% increase in extended protection plan revenues[135]. Vehicle Sales and Inventory - Used vehicle unit sales reached 211,020 in the second quarter, a 5.1% increase from the prior year[108]. - The company purchased approximately 300,000 vehicles in the second quarter, up 2.9% year-over-year, with over 70% self-sufficiency rate[116]. - Used vehicle unit sales increased by 5.1% in the second quarter of fiscal 2025, totaling 211,020 units sold[123]. - Average selling prices for used vehicles decreased by 4.6% to $26,245 in the second quarter of fiscal 2025, reflecting lower vehicle acquisition costs[125]. - Total inventory as of August 31, 2024, was $3.40 billion, a decrease of $280.3 million from the start of the fiscal year[168]. CarMax Auto Finance (CAF) - CarMax Auto Finance (CAF) income decreased by 14.4% to $115.6 million in the second quarter, with CAF financing 42.6% of retail used vehicle unit sales[104]. - The provision for loan losses was $112.6 million in Q2 of fiscal 2025, reflecting an increase of $52.2 million in lifetime loss estimates, nearly an 11% rise in loss expectations[161]. - The net penetration rate for CAF was 42.0% in Q2 of fiscal 2025, down from 42.8% in the prior year[158]. - CAF's managed portfolio aims for cumulative net losses in the 2% to 2.5% range over the life of the loans[150]. - CAF has expanded its asset-backed securitization program to include higher prime and non-prime issuances, enhancing funding capacity[153]. Store Expansion and Operations - The company opened two new stores and a standalone reconditioning center in Richland, Mississippi, with plans to open three additional stores and one auction facility by the end of the fiscal year[120]. - As of August 31, 2024, the company operated used car stores in 109 U.S. television markets, covering approximately 85% of the U.S. population[119]. - The company ended the second quarter of fiscal 2025 with 247 used car stores, an increase from 241 stores at the end of the same period in the previous year[130]. - The company maintains a multi-year pipeline of sites to support store and capacity growth, with 164 of 247 used car stores located on owned sites[171]. Cost Management and Efficiency - CarMax aims to achieve a mid-70% range for SG&A as a percentage of gross profit on an annual basis, requiring low-single-digit gross profit growth[117]. - The company is focused on enhancing logistics efficiency, expecting to drive savings of approximately $200 per retail unit over the next one to two years[115]. - SG&A expenses increased by $24.9 million, or 4.2%, in Q3 2025, primarily due to a $15.6 million rise in compensation and benefits[146]. Debt and Cash Flow - Total debt as of August 31, 2024, was $18.71 billion, with cash and cash equivalents at $524.67 million[173]. - Net cash used in investing activities totaled $215.5 million, slightly up from $211.8 million in fiscal 2024, with capital expenditures of $213.1 million compared to $210.2 million in the prior year[171]. - Net cash used in financing activities was $283.1 million, a decrease from net cash provided of $547.0 million in the prior year, influenced by net payments on long-term debt of $306.3 million and stock repurchases of $213.3 million[172]. Market Outlook and Risks - The company cautions that various factors, including changes in economic conditions and competitive landscape, could materially affect future results[181]. - There have been no material changes to market risk since February 29, 2024[183].

Group 1 - The article discusses the author's previous stance on CarMax, Inc. (NYSE: KMX), indicating a lack of competitive advantages and suggesting it is not a long-term investment opportunity [1] - The focus is on identifying companies with exceptional quality and a proven ability to reinvest capital for impressive returns, particularly those with a market capitalization of less than $10 billion [1] - The ideal companies should demonstrate a long-term capability of capital compounding with a high compound annual growth rate, potentially delivering tenfold returns or greater [1] Group 2 - The investment strategy is primarily conservative, with occasional pursuits of opportunities that present a favorable risk-reward ratio, ensuring substantial upside with limited downside [1] - The approach emphasizes maintaining a long-term perspective to generate higher returns compared to market indices, especially in a rapidly evolving investment landscape [1] - The author holds a Bachelor's degree in finance and accounting, indicating a foundation in financial analysis [1]

As CarMax adapts to a shifting automotive landscape, the company is focused on improving the customer experience to maintain its leadership as the nation's largest used car dealer. Despite a 12.7% decrease in wholesale sales (where vehicles are auctioned off to auto dealers), CarMax on Thursday (Sept. 26) reported a 2.9% increase in overall vehicle sales for the second quarter ending Aug. 31. CEO Bill Nash emphasized the company's priority on creating a seamless, omnichannel shopping experience is vital to ...

CarMax Inc. (KMX) reported second-quarter fiscal 2025 (ended Aug. 31, 2024) adjusted earnings per share of 85 cents, which missed the Zacks Consensus Estimate of 86 cents. The bottom line, however, rose from 75 cents per share recorded in the year-ago period. The auto retailer registered revenues of $7 billion in the quarter under review, which beat the Zacks Consensus Estimate of $6.85 billion. The top line, however, contracted 0.9% year over year. Segmental Performance CarMax's used-vehicle net sales tota ...