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The Zacks Retail and Wholesale sector has fallen on tough times in 2022, down nearly 25% and lagging behind the general market by a fair margin.
A company residing in the realm, CarMax, Inc. (KMX - Free Report) , has seen its near-term earnings outlook turn sour over the last several months, pushing the stock into a Zacks Rank #5 (Strong Sell).
Image Source: Zacks Investment Research
CarMax Inc. is the largest retailer of used vehicles in the U.S. and one of the nation's largest operators of wholesale vehicle auctions. The company operates under two reportable segments: CarMax Sales Operations and CarMax Auto Finance (CAF).
Let’s take a closer look at the company to see how it shapes up.
Share Performance
KMX shares have tumbled in 2022, down nearly 50% and coming nowhere near the S&P 500’s performance.
Image Source: Zacks Investment Research
And over the last three months, the adverse price action of KMX shares has continued, with shares losing more than 30% in value and again widely lagging behind the S&P 500.
Clearly, sellers have had a tight grip on shares.
Quarterly Performance
CarMax has posted mixed earnings results as of late, falling short of the Zacks Consensus EPS Estimate in three of its last five quarters. In its latest quarter, KMX fell short of earnings expectations by more than 40%.
Revenue results have also left some to be desired as of late, with the company falling short of revenue estimates in back-to-back quarters. Below is a chart illustrating KMX’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Growth Outlook
The company’s earnings are forecasted to take a sizable hit in its current fiscal year (FY23); the Zacks Consensus EPS Estimate of $4.02 indicates a Y/Y decline of more than 40%.
Still, the company’s top-line is in better standing, with estimates suggesting Y/Y upticks of 0.3% and 1.4% in FY23 and FY24, respectively.
Bottom Line
Negative earnings estimate revisions and weak quarterly results paint a less-than-ideal picture for the company in the short term.
CarMax, Inc. (KMX - Free Report) is a Zacks Rank #5 (Strong Sell), telling us it has a weak near-term earnings outlook.
Investors should pivot to stocks that either carry a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) – these stocks have a much stronger earnings outlook and potential to deliver explosive gains in the short term.
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Bear of the Day: CarMax, Inc. (KMX)
The Zacks Retail and Wholesale sector has fallen on tough times in 2022, down nearly 25% and lagging behind the general market by a fair margin.
A company residing in the realm, CarMax, Inc. (KMX - Free Report) , has seen its near-term earnings outlook turn sour over the last several months, pushing the stock into a Zacks Rank #5 (Strong Sell).
Image Source: Zacks Investment Research
CarMax Inc. is the largest retailer of used vehicles in the U.S. and one of the nation's largest operators of wholesale vehicle auctions. The company operates under two reportable segments: CarMax Sales Operations and CarMax Auto Finance (CAF).
Let’s take a closer look at the company to see how it shapes up.
Share Performance
KMX shares have tumbled in 2022, down nearly 50% and coming nowhere near the S&P 500’s performance.
Image Source: Zacks Investment Research
And over the last three months, the adverse price action of KMX shares has continued, with shares losing more than 30% in value and again widely lagging behind the S&P 500.
Clearly, sellers have had a tight grip on shares.
Quarterly Performance
CarMax has posted mixed earnings results as of late, falling short of the Zacks Consensus EPS Estimate in three of its last five quarters. In its latest quarter, KMX fell short of earnings expectations by more than 40%.
Revenue results have also left some to be desired as of late, with the company falling short of revenue estimates in back-to-back quarters. Below is a chart illustrating KMX’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Growth Outlook
The company’s earnings are forecasted to take a sizable hit in its current fiscal year (FY23); the Zacks Consensus EPS Estimate of $4.02 indicates a Y/Y decline of more than 40%.
Still, the company’s top-line is in better standing, with estimates suggesting Y/Y upticks of 0.3% and 1.4% in FY23 and FY24, respectively.
Bottom Line
Negative earnings estimate revisions and weak quarterly results paint a less-than-ideal picture for the company in the short term.
CarMax, Inc. (KMX - Free Report) is a Zacks Rank #5 (Strong Sell), telling us it has a weak near-term earnings outlook.
Investors should pivot to stocks that either carry a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) – these stocks have a much stronger earnings outlook and potential to deliver explosive gains in the short term.