CarMax, Inc.

Company Description

Carmax, Inc., through its subsidiaries, operates as a retailer of used vehicles in the United States. The company was founded in 1993 and has a market cap of $4.41 billion.

Shares of KMX have been trending higher since bottoming out in late May. The company's better than expected Q2 results, reported on Sep 22, provided more bullish sentiment.

Second-Quarter Results

Sales were up 13% from last year to $2.08 billion. Earnings also came in strong at 47 cents per share, blowing past the Zacks Consensus Estimate of 18 cents. The company has produced big earnings surprises in each of the last 3 quarters, averaging 645%.

CarMax noted that sales at stores open for at least one year were up 8% while expenses were down 3.1% on lower advertising administrative costs.

Estimates Rising

Estimates have been steadily rising for the last few months, with the current year up 9 cents to 48 cents per share. The next-year estimate is bullish, pegged at 69 cents,

Valuation

In light of the big gains of the last few months, this stock doesn't come cheap, trading at 42X projected current-year earnings.

The Chart

Shares of CMX have posted huge gains over the last few months, bottoming out just below $10 in late May and recently topping off above $21.50. Take a look at the chart below.

Read the full analyst report on KMX