CarMax (KMX) Lags Q2 Earnings Estimates

Core Insights - CarMax reported quarterly earnings of $0.85 per share, missing the Zacks Consensus Estimate of $0.86 per share, but showing an increase from $0.75 per share a year ago, resulting in an earnings surprise of -1.16% [1] - The company posted revenues of $7.01 billion for the quarter ended August 2024, surpassing the Zacks Consensus Estimate by 2.38%, although this represents a decline from year-ago revenues of $7.07 billion [2] - CarMax shares have underperformed the market, losing about 2.9% since the beginning of the year compared to the S&P 500's gain of 20% [3] Earnings Outlook - The earnings outlook for CarMax is mixed, with the current consensus EPS estimate for the coming quarter at $0.61 on $6 billion in revenues, and $3 on $25.73 billion in revenues for the current fiscal year [7] - The company's Zacks Rank is currently 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Industry Context - The Automotive - Retail and Wholesale - Parts industry, to which CarMax belongs, is currently in the bottom 12% of the Zacks industry rankings, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact CarMax's stock performance [5]