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CarMax (KMX) Stock Sinks As Market Gains: What You Should Know

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CarMax (KMX - Free Report) closed the most recent trading day at $136, moving -0.45% from the previous trading session. This change lagged the S&P 500's daily gain of 0.6%.

Heading into today, shares of the used car dealership chain had lost 0.19% over the past month, outpacing the Retail-Wholesale sector's loss of 2.28% and lagging the S&P 500's gain of 1.21% in that time.

Investors will be hoping for strength from KMX as it approaches its next earnings release. On that day, KMX is projected to report earnings of $1.75 per share, which would represent a year-over-year decline of 2.23%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.42 billion, up 19.41% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.73 per share and revenue of $26.47 billion, which would represent changes of +48.89% and +39.69%, respectively, from the prior year.

Any recent changes to analyst estimates for KMX should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 3.26% higher within the past month. KMX is holding a Zacks Rank of #1 (Strong Buy) right now.

Valuation is also important, so investors should note that KMX has a Forward P/E ratio of 20.31 right now. This represents a premium compared to its industry's average Forward P/E of 19.73.

Investors should also note that KMX has a PEG ratio of 1.17 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Automotive - Retail and Wholesale - Parts was holding an average PEG ratio of 1.48 at yesterday's closing price.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 5, putting it in the top 2% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on

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