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Is a Beat in the Cards for CarMax (KMX) in Q3 Earnings?
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CarMax Inc. (KMX - Free Report) is expected to report third-quarter fiscal 2017 (ended Nov 30, 2016) results on Dec 20, before the opening bell. In the last quarter, the company posted break-even results. Let’s see how things are shaping up prior to this announcement.
Why a Likely Positive Surprise?
Our proven model shows that CarMax is likely to beat earnings this quarter because it has the right combination of the two key components.
Zacks ESP:Earnings ESP for CarMax is currently pegged at +2.82% as the Most Accurate estimate of 73 cents is above the Zacks Consensus Estimate of 71 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CarMax carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings. Conversely, 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.
The combination of CarMax’s Zacks Rank #3 and positive ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-than-Expected Earnings?
CarMax pursues an aggressive store growth policy, driven by improvements in the sales environment in the U.S. New stores help the company foray 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 buybacks, which helps boost earnings. As of Aug 31, 2016, the company had $1.89 billion remaining under the program. All these factors are likely to drive the company’s third-quarter fiscal 2017 results.
Price Performance
So far this year, the company’s shares have rose 15.2% while the Zacks categorized Retail/Wholesale-Auto Parts industry saw a 9.6% increase. The upside in the stock price is driven by aggressive store expansion and capital deployment to boost shareholders’ value.
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:
Autoliv, Inc. (ALV - Free Report) has an Earnings ESP of +2.22% and a Zacks Rank #3. The company will report fourth-quarter 2016 financial numbers on Feb 3.
Ford Motor Company (F - Free Report) has an Earnings ESP of +2.7% and a Zacks Rank #3. The company is expected to release fourth-quarter 2016 results on Jan 26.
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Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>
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Is a Beat in the Cards for CarMax (KMX) in Q3 Earnings?
CarMax Inc. (KMX - Free Report) is expected to report third-quarter fiscal 2017 (ended Nov 30, 2016) results on Dec 20, before the opening bell. In the last quarter, the company posted break-even results. Let’s see how things are shaping up prior to this announcement.
Why a Likely Positive Surprise?
Our proven model shows that CarMax is likely to beat earnings this quarter because it has the right combination of the two key components.
Zacks ESP: Earnings ESP for CarMax is currently pegged at +2.82% as the Most Accurate estimate of 73 cents is above the Zacks Consensus Estimate of 71 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CarMax carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings. Conversely, 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.
The combination of CarMax’s Zacks Rank #3 and positive ESP makes us reasonably confident of an earnings beat.
CARMAX GP (CC) Price and EPS Surprise
CARMAX GP (CC) Price and EPS Surprise | CARMAX GP (CC) Quote
What is Driving the Better-than-Expected Earnings?
CarMax pursues an aggressive store growth policy, driven by improvements in the sales environment in the U.S. New stores help the company foray 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 buybacks, which helps boost earnings. As of Aug 31, 2016, the company had $1.89 billion remaining under the program. All these factors are likely to drive the company’s third-quarter fiscal 2017 results.
Price Performance
So far this year, the company’s shares have rose 15.2% while the Zacks categorized Retail/Wholesale-Auto Parts industry saw a 9.6% increase. The upside in the stock price is driven by aggressive store expansion and capital deployment to boost shareholders’ value.
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:
General Motors (GM - Free Report) , which is expected to report fourth-quarter 2016 results on Feb 1, 2017, has an Earnings ESP of +1.70% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Autoliv, Inc. (ALV - Free Report) has an Earnings ESP of +2.22% and a Zacks Rank #3. The company will report fourth-quarter 2016 financial numbers on Feb 3.
Ford Motor Company (F - Free Report) has an Earnings ESP of +2.7% and a Zacks Rank #3. The company is expected to release fourth-quarter 2016 results on Jan 26.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>