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CarMax (KMX) Q1 Earnings: What to Expect from the Stock?
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CarMax Inc. (KMX - Free Report) is set to report first-quarter fiscal 2017 (ended May 31, 2016) results on Jun 21. Last quarter, the company posted a positive earnings surprise of 4.23%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
CarMax pursues an aggressive store growth policy, driven by improvements in the sales environment in the U.S. New stores help the company penetrate into new markets, thereby boosting sales. In addition, CarMax places greater emphasis on the used-car market, which helps it to outperform other players in the industry. The company is among the strongest operators in its peer group. Also, CarMax consistently enhances shareholder value through share buybacks, which helps boost earnings per share. All these factors are likely to drive the company’s first-quarter fiscal 2017 results.
However, CarMax is facing challenges such as high competition in the used-car market in the U.S. CarMax competes with AutoNation, Inc. (AN - Free Report) , which is the largest automotive retailer in the country. Also, other sales and revenues are witnessing a decline. This will adversely impact the company’s quarterly results.
Earnings Whispers
Our proven model does not conclusively show that CarMax is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate. CarMax’s Earnings ESP is 0.00% because the Most Accurate Estimate and the Zacks Consensus Estimate both stand at 93 cents.
Zacks Rank: CarMax carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Johnson Controls Inc. (JCI - Free Report) has an Earnings ESP of +2.91% and a Zacks Rank #3. The company’s third-quarter fiscal 2016 financial results are expected to release on Jul 22.
Tenneco Inc. has an Earnings ESP of +2.48% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Jul 22.
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CarMax (KMX) Q1 Earnings: What to Expect from the Stock?
CarMax Inc. (KMX - Free Report) is set to report first-quarter fiscal 2017 (ended May 31, 2016) results on Jun 21. Last quarter, the company posted a positive earnings surprise of 4.23%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
CarMax pursues an aggressive store growth policy, driven by improvements in the sales environment in the U.S. New stores help the company penetrate into new markets, thereby boosting sales. In addition, CarMax places greater emphasis on the used-car market, which helps it to outperform other players in the industry. The company is among the strongest operators in its peer group. Also, CarMax consistently enhances shareholder value through share buybacks, which helps boost earnings per share. All these factors are likely to drive the company’s first-quarter fiscal 2017 results.
However, CarMax is facing challenges such as high competition in the used-car market in the U.S. CarMax competes with AutoNation, Inc. (AN - Free Report) , which is the largest automotive retailer in the country. Also, other sales and revenues are witnessing a decline. This will adversely impact the company’s quarterly results.
Earnings Whispers
Our proven model does not conclusively show that CarMax is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate. CarMax’s Earnings ESP is 0.00% because the Most Accurate Estimate and the Zacks Consensus Estimate both stand at 93 cents.
Zacks Rank: CarMax carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
CARMAX GP (CC) Price and EPS Surprise
CARMAX GP (CC) Price and EPS Surprise | CARMAX GP (CC) Quote
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Johnson Controls Inc. (JCI - Free Report) has an Earnings ESP of +2.91% and a Zacks Rank #3. The company’s third-quarter fiscal 2016 financial results are expected to release on Jul 22.
Tenneco Inc. has an Earnings ESP of +2.48% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Jul 22.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>