CarMax (NYSE:KMX) Shares Gap Up on Better-Than-Expected Earnings

CarMax, Inc. (NYSE:KMX)’s stock price gapped up before the market opened on Friday after the company announced better than expected quarterly earnings. The stock had previously closed at $64.33, but opened at $70.27. CarMax shares last traded at $67.08, with a volume of 2,898,134 shares changing hands.

The company reported $1.38 earnings per share for the quarter, beating the consensus estimate of $1.18 by $0.20. CarMax had a net margin of 1.90% and a return on equity of 8.22%. The business had revenue of $7.55 billion for the quarter, compared to the consensus estimate of $7.58 billion. During the same quarter in the previous year, the firm earned $0.97 earnings per share. The company’s revenue for the quarter was up 6.1% on a year-over-year basis.

Analyst Upgrades and Downgrades

Several equities analysts have weighed in on KMX shares. JPMorgan Chase & Co. lowered their price target on shares of CarMax from $72.00 to $65.00 and set an “underweight” rating on the stock in a report on Thursday, March 27th. Needham & Company LLC lowered their price target on shares of CarMax from $101.00 to $92.00 and set a “buy” rating on the stock in a report on Friday, April 11th. Wedbush reissued an “outperform” rating and issued a $90.00 target price on shares of CarMax in a report on Wednesday. Wall Street Zen raised shares of CarMax from a “sell” rating to a “hold” rating in a report on Wednesday, May 7th. Finally, Cfra Research raised shares of CarMax to a “strong-buy” rating in a report on Thursday, April 10th. Three investment analysts have rated the stock with a sell rating, four have assigned a hold rating, seven have assigned a buy rating and one has issued a strong buy rating to the company’s stock. Based on data from MarketBeat, CarMax has a consensus rating of “Hold” and a consensus target price of $85.82.

Insider Buying and Selling

In other CarMax news, Director Mitchell D. Steenrod purchased 1,300 shares of CarMax stock in a transaction that occurred on Thursday, April 24th. The shares were bought at an average price of $65.49 per share, for a total transaction of $85,137.00. Following the completion of the transaction, the director now owns 33,577 shares of the company’s stock, valued at approximately $2,198,957.73. This trade represents a 4.03% increase in their position. The acquisition was disclosed in a legal filing with the SEC, which is available through the SEC website. 1.70% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On CarMax

Large investors have recently bought and sold shares of the business. Zions Bancorporation National Association UT bought a new stake in CarMax in the first quarter worth $27,000. Cromwell Holdings LLC increased its position in CarMax by 104.8% in the fourth quarter. Cromwell Holdings LLC now owns 424 shares of the company’s stock worth $35,000 after purchasing an additional 217 shares during the last quarter. Accent Capital Management LLC bought a new stake in CarMax in the first quarter worth $34,000. Strengthening Families & Communities LLC increased its position in CarMax by 93.1% in the first quarter. Strengthening Families & Communities LLC now owns 531 shares of the company’s stock worth $39,000 after purchasing an additional 256 shares during the last quarter. Finally, Ameriflex Group Inc. bought a new stake in CarMax in the fourth quarter worth $53,000.

CarMax Price Performance

The company has a debt-to-equity ratio of 2.91, a current ratio of 2.31 and a quick ratio of 0.52. The company has a market cap of $10.48 billion, a P/E ratio of 21.39, a PEG ratio of 1.07 and a beta of 1.38. The firm’s 50-day moving average is $65.60 and its two-hundred day moving average is $75.47.

About CarMax

CarMax, Inc, through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. It operates in two segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; used vehicle auctions; extended protection plans to customers at the time of sale; and reconditioning and vehicle repair services.