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Why is CarMax (KMX) Up 1.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for CarMax, Inc. (KMX - Free Report) . Shares have added about 1.3% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is KMX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CarMax's Earnings and Revenues Miss Estimates in Q4
CarMax posted earnings per share of 67 cents in the fourth quarter of fiscal 2018 (ended Feb 28, 2018), reflecting a decline of 17.3% from 81 cents earned a year ago. Adjusted earnings came in at 77 cents per shares. Earnings missed the Zacks Consensus Estimate of 89 cents.
Net sales and operating revenues in the reported quarter increased 0.8% year over year to $4.1 billion. However, this figure missed the Zacks Consensus Estimate of $4.2 billion.
In fiscal 2018, earnings were $3.60 per share, up 10.4% year over year.
In fiscal 2018, net sales and operating revenues were $17.1 billion, up 7.8% from fiscal 2017.
During the quarter, used-vehicle revenues decreased 0.6% to $3.4 billion as unit sales declined 3.1% to 170,572 vehicles. Comparable-store used-vehicle unit sales decreased 8% in the quarter.
Wholesale vehicle revenues grew 13.2% to $527.2 million in the quarter. Unit sales increased 8.9% to 99,226 vehicles. The average selling price of wholesale vehicles rose 3.4% to $5,076.
Other sales and revenues declined 4.5% year over year. The company’s extended protection plan (EPP) revenues decreased 2.4%.
CarMax Auto Finance (CAF) reported an increase of 21.9% in income to $101.1 million in fourth-quarter fiscal 2018.
Store Openings
During the fourth quarter, CarMax opened four stores. It entered two new television markets and added two stores in existing television markets.
Share Repurchase Program
In the quarter under review, CarMax spent $127.8 million to repurchase 1.9 million shares under the existing share buyback program. As of Feb 28, 2018, the company had $1.02 billion of authorization remaining under its share repurchase program.
Financial Position
CarMax had cash and cash equivalents of $44.5 million as of Feb 28, 2018, increasing from $38.4 million as of Feb 28, 2017. Long-term debt (excluding current position) escalated to $995.5 million as of Feb 28, 2018, from $952.6 million as of Feb 28, 2017.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to four lower.
At this time, KMX has a nice Growth Score of B, though it is lagging a lot on the momentum front with an F. The stock was also allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, KMX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why is CarMax (KMX) Up 1.3% Since Last Earnings Report?
It has been about a month since the last earnings report for CarMax, Inc. (KMX - Free Report) . Shares have added about 1.3% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is KMX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CarMax's Earnings and Revenues Miss Estimates in Q4
CarMax posted earnings per share of 67 cents in the fourth quarter of fiscal 2018 (ended Feb 28, 2018), reflecting a decline of 17.3% from 81 cents earned a year ago. Adjusted earnings came in at 77 cents per shares. Earnings missed the Zacks Consensus Estimate of 89 cents.
Net sales and operating revenues in the reported quarter increased 0.8% year over year to $4.1 billion. However, this figure missed the Zacks Consensus Estimate of $4.2 billion.
In fiscal 2018, earnings were $3.60 per share, up 10.4% year over year.
In fiscal 2018, net sales and operating revenues were $17.1 billion, up 7.8% from fiscal 2017.
During the quarter, used-vehicle revenues decreased 0.6% to $3.4 billion as unit sales declined 3.1% to 170,572 vehicles. Comparable-store used-vehicle unit sales decreased 8% in the quarter.
Wholesale vehicle revenues grew 13.2% to $527.2 million in the quarter. Unit sales increased 8.9% to 99,226 vehicles. The average selling price of wholesale vehicles rose 3.4% to $5,076.
Other sales and revenues declined 4.5% year over year. The company’s extended protection plan (EPP) revenues decreased 2.4%.
CarMax Auto Finance (CAF) reported an increase of 21.9% in income to $101.1 million in fourth-quarter fiscal 2018.
Store Openings
During the fourth quarter, CarMax opened four stores. It entered two new television markets and added two stores in existing television markets.
Share Repurchase Program
In the quarter under review, CarMax spent $127.8 million to repurchase 1.9 million shares under the existing share buyback program. As of Feb 28, 2018, the company had $1.02 billion of authorization remaining under its share repurchase program.
Financial Position
CarMax had cash and cash equivalents of $44.5 million as of Feb 28, 2018, increasing from $38.4 million as of Feb 28, 2017. Long-term debt (excluding current position) escalated to $995.5 million as of Feb 28, 2018, from $952.6 million as of Feb 28, 2017.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to four lower.
CarMax, Inc. Price and Consensus
CarMax, Inc. Price and Consensus | CarMax, Inc. Quote
VGM Scores
At this time, KMX has a nice Growth Score of B, though it is lagging a lot on the momentum front with an F. The stock was also allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, KMX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.