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

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CarMax (KMX - Free Report) closed at $153.95 in the latest trading session, marking a -0.48% move from the prior day. This change lagged the S&P 500's daily gain of 0.09%.

Prior to today's trading, shares of the used car dealership chain had gained 18.5% over the past month. This has outpaced the Retail-Wholesale sector's gain of 9.07% and the S&P 500's gain of 8.19% in that time.

KMX will be looking to display strength as it nears its next earnings release. On that day, KMX is projected to report earnings of $1.47 per share, which would represent year-over-year growth of 3.52%. Meanwhile, our latest consensus estimate is calling for revenue of $7.44 billion, up 43.44% from the prior-year quarter.

KMX's full-year Zacks Consensus Estimates are calling for earnings of $7.33 per share and revenue of $30.17 billion. These results would represent year-over-year changes of +62.17% and +59.19%, respectively.

Investors should also note any recent changes to analyst estimates for KMX. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.7% lower. KMX currently has a Zacks Rank of #3 (Hold).

Digging into valuation, KMX currently has a Forward P/E ratio of 21.09. For comparison, its industry has an average Forward P/E of 20.64, which means KMX is trading at a premium to the group.

Investors should also note that KMX has a PEG ratio of 1.61 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 industry currently has a Zacks Industry Rank of 102, which puts it in the top 41% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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