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CarMax (KMX) Dips More Than Broader Markets: What You Should Know

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CarMax (KMX - Free Report) closed the most recent trading day at $125.21, moving -1.01% from the previous trading session. This change lagged the S&P 500's 0.14% loss on the day.

Coming into today, shares of the used car dealership chain had lost 7.33% in the past month. In that same time, the Retail-Wholesale sector gained 0.11%, while the S&P 500 gained 3.13%.

KMX will be looking to display strength as it nears its next earnings release, which is expected to be September 30, 2021. On that day, KMX is projected to report earnings of $1.80 per share, which would represent year-over-year growth of 0.56%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.61 billion, up 23.01% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.10 per share and revenue of $26.44 billion, which would represent changes of +57.08% and +39.54%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for KMX. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 5.58% higher within the past month. KMX is currently a Zacks Rank #2 (Buy).

Investors should also note KMX's current valuation metrics, including its Forward P/E ratio of 17.81. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 17.81.

We can also see that KMX currently has a PEG ratio of 1.03. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Automotive - Retail and Wholesale - Parts industry currently had an average PEG ratio of 1.4 as of yesterday's close.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 12, putting it in the top 5% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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