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CarMax (KMX) Down 16% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for CarMax (KMX - Free Report) . Shares have lost about 16% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CarMax due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
CarMax Beats Q3 Earnings Estimates
CarMax reported third-quarter fiscal 2022 (ended Nov 30, 2021) net earnings per share of $1.53, beating the Zacks Consensus Estimate of $1.48. This outperformance can be attributed to higher-than-anticipated revenues from the company’s used and wholesale vehicles segment. The bottom line also increased from $1.42 per share recorded in the year-ago period.
The auto retailer registered revenues of $8,527.8 million for the November-end quarter, beating the Zacks Consensus Estimate of $7,891 million. Also, the top line recorded a 64.5% year-over-year increase.
Segmental Performance
CarMax’s used-vehicle net sales summed $6,435.6 million for the reported quarter, up 53% year over year owing to an increase in average retail selling prices and higher unit sales. The metric also surpassed the consensus mark of $6,070 million. The units sold in this segment edged up 16.9% year over year to 227,424 vehicles. The average selling price of used vehicles soared 30.8% from the year-ago quarter to $27,995. Comparable store used-vehicle units grew 15.8%, while revenues climbed 51.4% from the prior-year level. Used-vehicle gross profit per unit (GPU) came in at $2,235, up from the prior-year quarter’s $2,151.
For the fiscal third quarter, wholesale vehicle revenues skyrocketed 132.1% from the year-ago level to $1,922.3 million. The reported figure also beat the Zacks Consensus Estimate of $1,508 million. Units sold and average selling price surged 48.5% and 58.4% year over year to 187,630 and $9,890, respectively. Wholesale vehicle GPU came in at $1,131, which increased from the year-ago period’s $906.
Other sales and revenues rose 15.7% year over year to $169.9 million for the fiscal third quarter. CarMax Auto Finance witnessed a 5.9% year-over-year decline in income to $166 million for the November-end quarter.
Other Tidbits
Selling, general and administrative expenses flared up 33.7% from the prior-year quarter to $575.9 million. The firm had cash/cash equivalents and long-term debt of $62.6 million and $2,602.6 million, respectively, as of Nov 30, 2021.
During the fiscal third quarter, CarMax bought back 0.9 million shares of common stock for $115.3 million under the share repurchase program. As of Nov 31, 2021, it had $876.2 million remaining under the share-repurchase authorization.
CarMax opened one new location during the fiscal third quarter and aims to open four new stores in the fiscal fourth quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, CarMax has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, CarMax has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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CarMax (KMX) Down 16% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for CarMax (KMX - Free Report) . Shares have lost about 16% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CarMax due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
CarMax Beats Q3 Earnings Estimates
CarMax reported third-quarter fiscal 2022 (ended Nov 30, 2021) net earnings per share of $1.53, beating the Zacks Consensus Estimate of $1.48. This outperformance can be attributed to higher-than-anticipated revenues from the company’s used and wholesale vehicles segment. The bottom line also increased from $1.42 per share recorded in the year-ago period.
The auto retailer registered revenues of $8,527.8 million for the November-end quarter, beating the Zacks Consensus Estimate of $7,891 million. Also, the top line recorded a 64.5% year-over-year increase.
Segmental Performance
CarMax’s used-vehicle net sales summed $6,435.6 million for the reported quarter, up 53% year over year owing to an increase in average retail selling prices and higher unit sales. The metric also surpassed the consensus mark of $6,070 million. The units sold in this segment edged up 16.9% year over year to 227,424 vehicles. The average selling price of used vehicles soared 30.8% from the year-ago quarter to $27,995. Comparable store used-vehicle units grew 15.8%, while revenues climbed 51.4% from the prior-year level. Used-vehicle gross profit per unit (GPU) came in at $2,235, up from the prior-year quarter’s $2,151.
For the fiscal third quarter, wholesale vehicle revenues skyrocketed 132.1% from the year-ago level to $1,922.3 million. The reported figure also beat the Zacks Consensus Estimate of $1,508 million. Units sold and average selling price surged 48.5% and 58.4% year over year to 187,630 and $9,890, respectively. Wholesale vehicle GPU came in at $1,131, which increased from the year-ago period’s $906.
Other sales and revenues rose 15.7% year over year to $169.9 million for the fiscal third quarter. CarMax Auto Finance witnessed a 5.9% year-over-year decline in income to $166 million for the November-end quarter.
Other Tidbits
Selling, general and administrative expenses flared up 33.7% from the prior-year quarter to $575.9 million. The firm had cash/cash equivalents and long-term debt of $62.6 million and $2,602.6 million, respectively, as of Nov 30, 2021.
During the fiscal third quarter, CarMax bought back 0.9 million shares of common stock for $115.3 million under the share repurchase program. As of Nov 31, 2021, it had $876.2 million remaining under the share-repurchase authorization.
CarMax opened one new location during the fiscal third quarter and aims to open four new stores in the fiscal fourth quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, CarMax has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, CarMax has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.