CarMax stock is sliding after an analyst downgraded the car retailer as “new and used vehicle shortage [will] likely to extend into early 2024.” Evercore ISI analyst Michael Montani reduced his rating on CarMax (ticker: KMX) to In Line from Outperform, trimmed estimates, and cut the price target to $120 from $145.
Why is CarMax (KMX) stock down today?
Why Is CarMax (KMX) Stock Down Today? CarMax (NYSE: KMX) stock is slipping on Tuesday after the company released its earnings report for the fourth quarter of fiscal 2022. The bad news for KMX stock starts with its diluted earnings per share of 98 cents.
What drove CarMax's Q2 earnings growth?
Analysts had forecast that CarMax would earn $1.90 per share on sales of $6.9 billion for its fiscal Q2 2022. In fact, CarMax earned only $1.72 per share despite booking $8 billion in sales. Image source: Getty Images. With prices on used cars still rising through the sunroof, CarMax grew its Q2 sales 49% year over year.
How profitable is CarMax?
Per car, CarMax booked about a $2,185 average gross profit on its retail sales. Wholesale profits stopped at $1,005 per car -- down about 7.5% from the same quarter of last year. Total gross profits for the company increased 8% year over year.
Is CarMax in financial trouble?
The lack of inventory is contributing to higher car prices and is a problem in itself. CarMax shares fell 7.4% to $95.53 on Tuesday. The stock has declined about 26.7% year to date. CarMax did manage to increase market share in fiscal 2022.
Is CarMax stock a buy?
CarMax has received a consensus rating of Buy. The company's average rating score is 2.62, and is based on 8 buy ratings, 5 hold ratings, and no sell ratings.
Will CarMax stock go up?
The 14 analysts offering 12-month price forecasts for Carmax Inc have a median target of 105.50, with a high estimate of 165.00 and a low estimate of 74.00. The median estimate represents a +21.29% increase from the last price of 86.98.
Is CarMax a profitable company?
Highlights: CarMax's share of the nationwide age 0-10 year old used vehicle market increased to a record 4.0% in calendar year 2021, up approximately 13% from 3.5% in calendar year 2020. Net revenues rose 48.8% to $7.7 billion compared with the prior year fourth quarter.
Is KMX buy or sell?
The consensus among 11 Wall Street analysts covering (NYSE: KMX) stock is to Buy KMX stock.
How do I buy CarMax stock?
How to buy shares in CarMaxCompare share trading platforms. Use our comparison table to help you find a platform that fits you.Open your brokerage account. Complete an application with your details.Confirm your payment details. Fund your account.Research the stock. ... Purchase now or later. ... Check in on your investment.
Who owns CarMax now?
CarMax, Inc. is a used vehicle retailer based in the United States. It operates two business segments: CarMax Sales Operations and CarMax Auto Finance....CarMax.TypePublic companyRevenueUS$18.95 billion (FY2021)Net incomeUS$2.37 billion (FY2021)Number of employeesc. 27,000+ (2021)ParentCircuit City (1993–2002)7 more rows
What is the difference between CarMax and Carvana?
Carvana is a better option if you look for convenience and ease of use in your purchases and trades. On the other hand, CarMax is ideal for people who want to test drive the car beforehand and who do not mind going to their nearest CarMax location to do it.
How successful is CarMax?
--(BUSINESS WIRE)-- CarMax, Inc. (NYSE:KMX), the nation's largest and most profitable retailer of used cars, today reported results for the third quarter ended November 30, 2021. Highlights: Record net revenues of $8.5 billion, up 64.5% compared with the prior year third quarter.
CarMax Earnings
Estimates: Analysts expected CarMax earnings to climb 6.4% to $1.16. Revenue was seen growing 9.6% to $4.71 billion, according to Zacks Investment Research. Same-store sales were forecast expected to climb 5.95%, according to Consensus Metrix estimates.
CarMax Stock
Shares of the no-haggle used car retailer fell 6.2% to 92.69 on the stock market today, gapping below their 50-day line. CarMax stock cleared a 91 buy point in October. As of Friday's close, it has a new flat base with a 100.59 buy point, according to MarketSmith analysis.
Why did Carmax close its stores?
Q1 sales plummeted 40% year over year with locations closed because of the coronavirus pandemic , causing the company to withdraw some of its credit as a precaution.
How many Carmax stores will be open in 2021?
First, the company had paused opening new locations because of the coronavirus. Those are now back on track, and it expects to open between eight and 10 new stores in fiscal 2021.
What happens if you buy Carmax stock?
Answer: If you buy and hold CarMax stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you - at least if the company is otherwise strong.
Is the average return after a rise lower than a fall?
Answer: The average return after a rise is understandably lower than a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks - although KMX stock appears to be an exception to this general observation.
How often does Carmax mark down vehicles?
It's possible their policies have changed since I work there, but Carmax actually does a series of somewhat complex calculations in conjunction with weekly or twice-monthly reviews of inventory to determine which vehicles should be marked down. Vehicles may potentially be marked down several times before they are sent to auction, or they may only be marked down once or twice before they are sent to auction or shipped to another location based on inventory need.
How does Carmax work?
Everything CarMax does is driven by algorithms that run constantly looking at the market and setting prices for them (internally) on what they should be paying for trade-ins as well as what their inventory should be priced at.
What is the biggest factor that CarMax considers when pricing inventory (cars for sale)?
That said, the biggest factor that CarMax considers when pricing inventory (cars for sale) is time on the lot - like any dealer, the goal is minimize time sitting on the lot. So if you found your favorite car and wished it was just a few $K cheaper, you can ‘Favorite’ it on the website and get alerts as the price drops over time.
What is a carmax inspection?
At a regular dealership (I worked at a Mitsubishi dealer in the past), the inspection is basically so that the used car manager can know all that is wrong with the car. They don’t share the results with the customer.
What happens if you buy a certified car from Carmax?
If you purchase that low-miles, “certified” vehicle from Carmax, you’re only going to get whatever remains of the original manufacturers warranty. That same “certified” vehicle purchased from a dealership affiliated with the manufacturer (ex: used Nissan from a Nissan dealer), you will likely get an extended warranty included with the purchase, and often times access to special financing.
What does valuemax mean in cars?
If you see vehicles being sold as "Valuemax", these vehicles are likely close to being sent to auction or relocated.
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