Back to top

Image: Bigstock

Bear of the Day: CarMax (KMX)

Read MoreHide Full Article

Markets have been under pressure for nearly the entire month of February. It’s been a hawkish Fed, along with hotter-than-expected inflationary data that have taken the rally off the rails. That, coupled with some nasty reactions to earnings reports have really put the markets on its heels. That has created some great opportunities out there, but that does not mean that you should take the dartboard approach to the market. Rather, try to avoid stocks with weak earnings trends. Often times, investors don’t even realize a stock they are looking at has had recent negative earnings revisions coming from analysts.

One such stock that has seen some negative earnings revisions is today’s Bear of the Day, CarMax (KMX - Free Report) . CarMax is an American company that operates as a used car retailer and automotive services provider. The company was founded in 1993 and is headquartered in Richmond, Virginia.

CarMax's primary business is the sale of used cars through its network of over 220 stores across the United States. The company offers a wide variety of makes and models, and each vehicle undergoes a thorough inspection and reconditioning process before being put up for sale.

Zacks Investment Research
Image Source: Zacks Investment Research

The stock is currently a Zacks Rank #5 (Strong Sell). The reason for the unfavorable rank is that four analysts have cut their earnings estimates for the current year and next year. That bearish sentiment has cut down the Zacks Consensus Estimate for the current year from $3.92 to $2.82 while next year’s number is off from $4.50 to $2.93.

The Automotive, Retail and Wholesale industry is in the Bottom 7% of our Zacks Industry Rank. The highest Zacks Rank in that industry is currently a Zacks Rank #3 (Hold). There are a handful of company’s with that rank, they include AutoZone (AZO - Free Report) and Hagerty (HGTY - Free Report) .

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

AutoZone, Inc. (AZO) - free report >>

CarMax, Inc. (KMX) - free report >>

Hagerty, Inc. (HGTY) - free report >>

Published in