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

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CarMax (KMX - Free Report) closed at $147.09 in the latest trading session, marking a +0.07% move from the prior day. This change outpaced the S&P 500's 0.46% loss on the day. At the same time, the Dow lost 0.7%, and the tech-heavy Nasdaq lost 0.68%.

Heading into today, shares of the used car dealership chain had gained 2.48% over the past month, outpacing the Retail-Wholesale sector's gain of 2.35% and lagging the S&P 500's gain of 4.05% in that time.

Wall Street will be looking for positivity from CarMax as it approaches its next earnings report date. In that report, analysts expect CarMax to post earnings of $1.47 per share. This would mark year-over-year growth of 3.52%. Our most recent consensus estimate is calling for quarterly revenue of $7.44 billion, up 43.44% from the year-ago period.

KMX's full-year Zacks Consensus Estimates are calling for earnings of $7.31 per share and revenue of $30.17 billion. These results would represent year-over-year changes of +61.73% and +59.19%, respectively.

Investors should also note any recent changes to analyst estimates for CarMax. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.7% lower. CarMax is currently a Zacks Rank #3 (Hold).

In terms of valuation, CarMax is currently trading at a Forward P/E ratio of 20.1. This represents a premium compared to its industry's average Forward P/E of 19.76.

We can also see that KMX currently has a PEG ratio of 1.54. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. KMX's industry had an average PEG ratio of 1.49 as of yesterday's close.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 104, 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.

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

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