Core Insights - CarMax reported earnings per share (EPS) of $0.64, which was below the estimated $1.03, and revenue of approximately $6.59 billion, falling short of the expected $7.02 billion, indicating challenges in the current market environment [2][6] - The company experienced a decline in used-car sales, with retail used unit sales decreasing by 5.4% and comparable store used unit sales falling by 6.3%, which significantly impacted its stock value and financial performance [3][6] - Despite the decrease in sales volume, CarMax maintained solid unit margins, with a gross profit per retail used unit of $2,216 and $993 per wholesale unit, indicating profitability on a per-unit basis [4][6] Financial Metrics - CarMax has a price-to-earnings (P/E) ratio of approximately 15.54 and a price-to-sales ratio of about 0.32, reflecting its market valuation [5] - The enterprise value to sales ratio is around 0.98, and the enterprise value to operating cash flow ratio is approximately 25.17, indicating the company's financial health [5] - The debt-to-equity ratio is about 2.85, suggesting significant financial leverage, but the company maintains a strong liquidity position with a current ratio of approximately 2.39, allowing it to cover short-term liabilities [5]
CarMax, Inc. (NYSE:KMX) Faces Market Challenges Despite Solid Unit Margins