Core Viewpoint - Recent data from CarMax KMX Auto Finance indicates a rise in loan delinquencies and net losses, raising concerns about credit quality in the used auto lender's portfolio [1][4]. Summary by Sections Loan Performance - After two months of stability, loan delinquency and loss rates have worsened, with May showing a sharper increase than typical seasonal trends [2][3]. - The portfolio-level delinquency rate increased by 36 basis points sequentially, exceeding the historical seasonal average of 18 basis points [7]. - Year-over-year, the portfolio-level delinquency rate rose by 16 basis points, contrasting with a trailing three-month trend of a decrease of 2 basis points [8]. Credit Quality Concerns - The cumulative net loss rate increased by 52 basis points year-over-year, consistent with a trailing three-month trend of 48 basis points [8]. - Newer securitizations are not performing better than older vintages, with the delinquency rate for the most recent prime securitization trending higher than older vintages [5][4]. Analyst Insights - Analyst Scott Devitt maintains an Outperform rating on CarMax with a price target of $90, despite the concerns raised by the recent data [1]. - Devitt projects first-quarter revenue of $7.67 billion and earnings per share of $1.23 [10]. - The company is expected to face increased loan loss provisions as it targets lower-tier borrowers to maintain interest margins [6][4]. Market Dynamics - Despite the challenges, the used auto market remains healthy, supported by strong gross profit margins for scaled retailers [9][10]. - CarMax has sustained robust sourcing methods and integrated credit capabilities, which have helped maintain performance amid macroeconomic uncertainties [10].

Financial Performance - CarMax is set to release its first-quarter financial results on June 20, with analysts expecting earnings of $1.17 per share, an increase from $0.97 per share in the same period last year [1] - The company projects quarterly revenue of $7.53 billion, compared to $7.11 billion a year earlier [1] - CarMax reported weaker-than-expected earnings for the fourth quarter on April 10 [1] Stock Performance - CarMax shares fell by 2.2%, closing at $64.43 on Tuesday [2] Analyst Ratings - Wedbush analyst Scott Devitt reiterated an Outperform rating with a price target of $90 [4] - RBC Capital analyst Steven Shemesh maintained an Outperform rating but reduced the price target from $103 to $80 [4] - JP Morgan analyst Rajat Gupta maintained an Underweight rating and lowered the price target from $72 to $65 [4] - Truist Securities analyst Scot Ciccarelli maintained a Hold rating and increased the price target from $72 to $88 [4] - Oppenheimer analyst Brian Nagel maintained an Outperform rating with a price target of $105 [4]

Core Viewpoint - CarMax (KMX) is expected to report quarterly earnings of $1.22 per share, a 25.8% increase year-over-year, with revenues projected at $7.56 billion, reflecting a 6.3% year-over-year growth [1]. Earnings Estimates - The consensus EPS estimate for the quarter has been revised upward by 0.9% over the past 30 days, indicating analysts' reassessment of their projections [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are linked to short-term stock price performance [3]. Revenue and Sales Projections - Analysts estimate 'Net sales - Wholesale vehicles' to reach $1.31 billion, a 4.7% increase from the prior year [5]. - 'Net sales - Other' is projected at $189.91 million, indicating a 5.8% year-over-year change [5]. - 'Net sales - Used vehicles' is expected to be $6.05 billion, reflecting a 6.6% increase year-over-year [5]. - The consensus for 'Other sales and revenues - Extended protection plan revenues' stands at $129.56 million, a 9.1% increase from the previous year [6]. Store and Unit Sales Estimates - Analysts project a total of 251 stores, up from 245 in the same quarter last year [6]. - 'Unit sales - Total vehicles' are expected to reach 378,575, compared to 358,817 a year ago [9]. - 'Unit sales - Used vehicles' is estimated at 224,745, up from 211,132 in the previous year [9]. Profitability Metrics - 'Revenue per vehicle retailed (ASP) - Used vehicles' is forecasted to be $26.84 thousand, compared to $26.53 thousand last year [7]. - 'Gross Profit per Unit - Used vehicles gross profit' is expected to be $2,384.83, up from $2,347 last year [7]. - 'Gross Profit per Unit - Wholesale vehicles gross profit' is projected at $1,070.91, compared to $1,064 last year [8]. - 'Revenue per vehicle retailed (ASP) - Wholesale vehicles' is expected to be $8.29 thousand, compared to $8.09 thousand last year [10]. Market Performance - CarMax shares have decreased by 3.5% over the past month, contrasting with the Zacks S&P 500 composite's increase of 1.7% [10]. - CarMax holds a Zacks Rank 3 (Hold), indicating it is expected to closely follow overall market performance in the near term [11].

Group 1 - CarMax is set to announce its Q1 FY'26 earnings on June 20th, with expected revenue of approximately $7.56 billion, reflecting a 6% year-over-year increase [2] - Adjusted earnings per share are anticipated to be around $1.19, compared to $0.97 in the same quarter last year [2] - The company has seen revenue growth driven by increased second-hand vehicle sales volume and expanded financing operations [2] Group 2 - CarMax's profitability has improved due to better cost management and digital innovations enhancing customer experience and operational efficiency [2] - The company has a market capitalization of $10 billion and reported a net income of $501 million over the past twelve months [2] - CarMax's total revenue for the last twelve months was $26 billion [2] Group 3 - Historical data shows that CarMax has had 20 recorded earnings data points over the last five years, with 8 positive and 12 negative one-day returns [4] - Positive one-day returns occurred about 40% of the time, increasing to 58% when considering the last three years [4] - The median of the positive returns is 5.9%, while the median of the negative returns is -9.4% [4]

Company Overview - CarMax is the largest retailer of used vehicles in the United States, headquartered in Richmond, VA [11] - In fiscal 2025, CarMax retailed 790,000 used vehicles and sold 540,000 vehicles through wholesale auctions [11] Financial Metrics - CarMax has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid performance [11] - The company has a Value Style Score of B, supported by a forward P/E ratio of 17.4, which is attractive for value investors [12] - The Zacks Consensus Estimate for CarMax's earnings for fiscal 2026 has increased by $0 to $3.78 per share, with two analysts revising their earnings estimates higher in the last 60 days [12] - CarMax has an average earnings surprise of 6.9%, suggesting it has a history of exceeding earnings expectations [12] Investment Considerations - With a solid Zacks Rank and top-tier Value and VGM Style Scores, CarMax is recommended for investors' consideration [12]

Core Insights - CarMax is enhancing the used electric vehicle (EV) buying experience through strategic partnerships and new resources aimed at empowering consumers [1][2][9] Group 1: Strategic Initiatives - CarMax has partnered with Recurrent to provide battery health assessments for used EVs, allowing consumers to access detailed battery range scores and reports [5][7] - The company is offering a $200 credit for the installation of Level 2 home chargers through Treehouse, addressing customer concerns about charging and range anxiety [6][7] - An online EV Hub has been launched to educate consumers on EV ownership, featuring guides and quizzes to assist in the purchasing process [3][4] Group 2: Market Positioning - CarMax aims to become a leader in the used EV sector, capitalizing on the growth of the electric vehicle market and enhancing the customer-centric experience [2][9] - The introduction of a badge on CarMax.com identifies vehicles eligible for the federal used EV tax credit of up to $4,000, simplifying the shopping experience for consumers [7] Group 3: Company Overview - In the fiscal year ending February 28, 2025, CarMax sold approximately 790,000 used vehicles and originated over $8 billion in receivables through CarMax Auto Finance [8]

Core Points - Richmond Ivy Soccer Club has unveiled their kits for the 2025 season, with CarMax returning as the front-of-jersey sponsor [1][8] - The Woven Together Kits feature custom designs in Midnight and Mint colorways, created by hummel Pro North America [1][4] Company Overview - CarMax has been a leader in the used car industry for over 30 years, emphasizing integrity and transparency in customer experience [2][7] - The company sold approximately 790,000 used vehicles and originated over $8 billion in receivables during the fiscal year ending February 28, 2025 [7][9] - CarMax operates 250 store locations and has been recognized for 21 consecutive years as one of the Fortune 100 Best Companies to Work For [9] Community Engagement - CarMax is committed to positively impacting communities, sponsoring various local sports teams and events, including the Richmond Ivy Soccer Club [2][3] - The partnership with Richmond Ivy SC aims to support and grow women's soccer in the Richmond area [3][10] Kit Design and Symbolism - The primary jersey's Midnight base symbolizes the depth of the Richmond community, while the mint green accents represent unity and support from fans [4][5] - The secondary kit features an Ivy design that reflects the club's aspirations and the interconnectedness of the community [5][6]

Group 1 - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1] - The Zacks Style Scores provide a unique rating system for stocks based on value, growth, and momentum characteristics, helping investors identify securities with high potential for market outperformance [2][3] Group 2 - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales, appealing to value investors [3] - The Growth Score emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4] - The Momentum Score assists investors in capitalizing on price trends, utilizing factors like short-term price changes and earnings estimate revisions [5] Group 3 - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors seeking attractive value, growth forecasts, and momentum [6] - The Zacks Rank, based on earnings estimate revisions, has shown significant success, with 1 (Strong Buy) stocks yielding an average annual return of +25.41% since 1988, outperforming the S&P 500 [8] Group 4 - CarMax, the largest retailer of used vehicles in the U.S., retailed 790,000 used vehicles in fiscal 2025 and sold 540,000 vehicles through wholesale auctions [11] - CarMax holds a 3 (Hold) Zacks Rank with a VGM Score of B and a Value Style Score of B, supported by a forward P/E ratio of 16.99 [12] - Recent upward revisions in earnings estimates for CarMax indicate a consensus estimate of $3.82 per share, with an average earnings surprise of 6.9%, making it a noteworthy consideration for investors [12]

Investment Rating - The report assigns an "Overweight" (OW) rating to General Motors (GM) and Ford, while Tesla and Rivian are rated "Underweight" (UW) [6][7]. Core Insights - The automotive industry is experiencing varied performance metrics across different companies, with GM and Ford showing potential upside in their stock prices, while Tesla and Rivian face significant downside risks [6][7]. - The report highlights the importance of valuation metrics such as EV/EBITDA, P/E ratios, and sales growth projections for assessing investment opportunities within the automotive sector [6][22]. Global Auto OEMs Investment Comparables - General Motors (GM) has a current price of $44.57 with a market cap of $43.067 billion and a target price of $53.00, indicating a 19% upside potential [6]. - Ford (F) is priced at $9.63 with a market cap of $38.294 billion and a target price of $11.00, representing a 14% upside [6]. - Ferrari (RACE) is valued at $439.97 with a target price of $460.00, showing a 5% upside [6]. - Tesla (TSLA) is currently priced at $241.37 with a target price of $120.00, indicating a -50% downside [6]. - Rivian (RIVN) has a price of $11.60 with a target price of $11.00, reflecting a -5% downside [6]. Global Auto Parts Suppliers Valuation Metrics - The average EV/EBITDA for US auto parts suppliers is projected at 1.8x for 2024, with a corresponding EBITDA margin of 12% [22]. - Aptiv (APTV) is rated "Overweight" with a current price of $51.71 and a target price of $102, indicating a 97% upside [22]. - Borg Warner (BWA) is rated "Overweight" with a price of $26.45 and a target price of $46, representing a 74% upside [22]. - Lear Corp (LEA) is rated "Overweight" with a price of $79.42 and a target price of $140, indicating a 76% upside [22]. Performance Metrics - The report indicates that the average revenue CAGR for US auto parts suppliers is projected to be 2% from 2023 to 2025 [74]. - The EBITDA margin for US auto parts suppliers is expected to be around 12% in 2025, with some companies showing higher margins [74][83]. - The report also highlights the financial returns of various suppliers, with some companies achieving significant returns on invested capital (ROIC) [54][56].

On this news, CarMax's stock price fell $13.61 per share, or 17%, to close at $66.45 per share on April 10, 2025. The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, London, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomeran ...