Why CarMax (KMX) is a Top Value Stock for the Long-Term

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]