CarMax (NYSE:KMX) Shares Gap Up After Earnings Beat

CarMax, Inc. (NYSE:KMX) shares gapped up prior to trading on Friday following a stronger than expected earnings report. 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 analysts’ consensus estimates of $1.18 by $0.20. The business had revenue of $7.55 billion during the quarter, compared to analyst estimates of $7.58 billion. CarMax had a net margin of 1.90% and a return on equity of 8.22%. CarMax’s revenue was up 6.1% compared to the same quarter last year. During the same period last year, the business earned $0.97 EPS.

Wall Street Analyst Weigh In

A number of research firms have weighed in on KMX. JPMorgan Chase & Co. reduced their price objective on shares of CarMax from $72.00 to $65.00 and set an “underweight” rating for the company in a research note on Thursday, March 27th. Needham & Company LLC reduced their price objective on shares of CarMax from $101.00 to $92.00 and set a “buy” rating for the company in a research note on Friday, April 11th. Robert W. Baird reduced their price objective on shares of CarMax from $95.00 to $90.00 and set an “outperform” rating for the company in a research note on Friday, April 11th. Wall Street Zen upgraded shares of CarMax from a “sell” rating to a “hold” rating in a research note on Wednesday, May 7th. Finally, Cfra Research upgraded shares of CarMax to a “strong-buy” rating in a research note on Thursday, April 10th. Three equities research analysts have rated the stock with a sell rating, four have given a hold rating, seven have assigned a buy rating and one has given a strong buy rating to the company. Based on data from MarketBeat.com, the company has an average rating of “Hold” and a consensus price target of $85.82.

Insider Transactions at CarMax

In other CarMax news, Director Mitchell D. Steenrod bought 1,300 shares of the business’s stock in a transaction that occurred on Thursday, April 24th. The stock was bought at an average cost 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 $2,198,957.73. This represents a 4.03% increase in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Company insiders own 1.70% of the company’s stock.

Institutional Trading of CarMax

Several large investors have recently added to or reduced their stakes in the business. Kovitz Investment Group Partners LLC grew its position in CarMax by 348.0% during the fourth quarter. Kovitz Investment Group Partners LLC now owns 6,595,067 shares of the company’s stock valued at $539,213,000 after buying an additional 5,122,850 shares during the period. Norges Bank bought a new stake in CarMax during the fourth quarter valued at approximately $423,187,000. Janus Henderson Group PLC grew its position in CarMax by 0.6% during the fourth quarter. Janus Henderson Group PLC now owns 4,671,950 shares of the company’s stock valued at $381,978,000 after buying an additional 29,715 shares during the period. Geode Capital Management LLC grew its position in CarMax by 1.3% during the fourth quarter. Geode Capital Management LLC now owns 3,710,267 shares of the company’s stock valued at $302,564,000 after buying an additional 47,058 shares during the period. Finally, Baird Financial Group Inc. lifted its holdings in CarMax by 7.1% during the first quarter. Baird Financial Group Inc. now owns 3,093,632 shares of the company’s stock valued at $241,056,000 after purchasing an additional 206,106 shares in the last quarter.

CarMax Price Performance

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