Back to top

Image: Bigstock

CarMax (KMX) Soars 6.7%: Is Further Upside Left in the Stock?

Read MoreHide Full Article

CarMax (KMX - Free Report) shares rallied 6.7% in the last trading session to close at $127.40. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 3.1% gain over the past four weeks.

Shares of CarMax rose 6.7% on Friday following the firm’s stellar first-quarter fiscal 2022 results. Not only did the company manage to beat estimates, its earnings and sales witnessed year-over-year jump of 8,66.7% and 138.4%, respectively. (Read more: CarMax Q1 Earnings Beat Estimates, Jump 8,666.7% Y/Y).

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For CarMax, the consensus EPS estimate for the quarter has been revised 1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on KMX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

See More Zacks Research for These Tickers

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

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

Published in