CarMax, Inc. (NYSE: KMX) released its quarterly earnings on Thursday, reporting earnings per share of $0.43. This figure fell short of analyst expectations, missing the consensus estimate of $0.50 by $0.07, as noted by FiscalAI. Despite the earnings miss, the company recorded a revenue of $5.79 billion, exceeding the forecast of $5.66 billion.
CarMax posted a net margin of 1.98% and a return on equity of 8.51%. Following the announcement, shares of CarMax opened at $41.01, reflecting a slight increase of 0.9%. The stock has experienced considerable volatility over the past year, with a fifty-two week low of $30.26 and a high of $91.25.
Debt and Market Metrics
The company reported a debt-to-equity ratio of 2.87, indicating a significant reliance on debt financing. Its current ratio stands at 2.46, while the quick ratio is 1.06. Additionally, CarMax’s fifty-day moving average price is $39.44, and its two-hundred-day moving average price is $53.10. With a market capitalization of $6.02 billion, the company has a price-to-earnings (P/E) ratio of 12.03 and a price-to-earnings growth (P/E/G) ratio of 1.00. The stock has a beta of 1.29, suggesting it is more volatile than the market.
Analyst Ratings and Forecasts
Several research analysts have recently evaluated CarMax’s performance. On November 6, JPMorgan Chase & Co. reiterated an “underweight” rating and reduced its price target to $30.00 from $50.00. Oppenheimer reaffirmed a “market perform” rating on September 26. Similarly, Royal Bank of Canada set a new target price of $34.00, down from $59.00, in a note released on November 7.
Additionally, Evercore ISI raised its price target from $35.00 to $37.00, maintaining an “in-line” rating, while Mizuho decreased its price objective from $78.00 to $46.00, assigning a “neutral” rating. The consensus rating for CarMax stands at “Reduce,” with an average target price of $41.69.
Institutional investors have also adjusted their stakes in CarMax. CYBER HORNET ETFs LLC acquired a new stake valued at approximately $28,000 during the second quarter. MUFG Securities EMEA plc and Advisory Services Network LLC followed suit, with new positions valued at about $30,000 and $32,000, respectively.
In the third quarter, Brown Brothers Harriman & Co. increased its holdings by 13.6%, now owning 2,573 shares valued at $115,000. Similarly, Ossiam boosted its holdings by 19.5%, owning 1,713 shares valued at $115,000.
CarMax operates as a retailer of used vehicles and related products across the United States through its subsidiaries. The company segments its operations into CarMax Sales Operations and CarMax Auto Finance, providing customers with a diverse range of vehicle options, including domestic, imported, and luxury models, as well as hybrid and electric vehicles.
