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CarMax (KMX) to Report Q4 Earnings: What's in the Cards?
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CarMax Inc. (KMX - Free Report) is slated to report fourth-quarter fiscal 2018 (ended Feb 28, 2018) results on Apr 4, before the opening bell. Last quarter, this specialty retailer of used vehicles delivered a negative earnings surprise of 1.2%.
The company pulled off positive earnings surprises in three of the trailing four quarters with an average beat of 5%. CarMax has expected long-term growth rate of 14.8%.
Let’s see how things have shaped up for the forthcoming announcement.
CarMax aims at the used-car market and is one of the strongest among the peers. In fiscal 2017, used vehicle sales rose 6.7%, supported by an 8.3% year-over-year increase in used-car units sold. In third-quarter fiscal 2018, CarMax’s total used-vehicle unit sales rose 8.2%, which is likely to continue in the fiscal fourth quarter.
The Richmond, VA-based company is also following an aggressive store expansion scheme in order to grow its presence in the existing and new markets. It opened total six stores during the first two quarters of fiscal 2018. During the third quarter of fiscal 2018, CarMax opened five stores.
A significant increase in cash outflows from operations and rising capital expenditures might affect CarMax’s revenues.
For the soon-to-be-released quarterly results, the Zacks Consensus Estimate for net sales of used-vehicle retail is pegged at $3.6 billion, up from the fiscal third quarter’s net sales of $3.4 billion.
Similarly, the Zacks Consensus Estimate for net sales of the company’s wholesale vehicles stands at $499 million, down from the fiscal second quarter’s net sales of $552.8 million.
Also, the Zacks Consensus Estimate for Other sales and revenues is expected to be $135 million, up from the fiscal third quarter’s figure of $129 million.
Earnings Whispers
Our proven model does not conclusively show that CarMax is likely to beat earnings in this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: CarMax has an Earnings ESP of -3.51% as the Most Accurate estimate of 86 cents is lower than the Zacks Consensus Estimate of 89 cents. 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, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against Sell-rated stocks (#4 or 5) going into earnings announcement, especially when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are a few companies worth considering in the same space, with the right combination of elements to surpass estimates this quarter:
BorgWarner Inc. (BWA - Free Report) has an Earnings ESP of +2.02% and a Zacks Rank of 2. It is expected to report upcoming earnings results on Apr 26.
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +2.57% and a Zacks Rank of 3. It is expected to report upcoming earnings results on May 1.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Image: Bigstock
CarMax (KMX) to Report Q4 Earnings: What's in the Cards?
CarMax Inc. (KMX - Free Report) is slated to report fourth-quarter fiscal 2018 (ended Feb 28, 2018) results on Apr 4, before the opening bell. Last quarter, this specialty retailer of used vehicles delivered a negative earnings surprise of 1.2%.
The company pulled off positive earnings surprises in three of the trailing four quarters with an average beat of 5%. CarMax has expected long-term growth rate of 14.8%.
Let’s see how things have shaped up for the forthcoming announcement.
CarMax, Inc. Price and EPS Surprise
CarMax, Inc. Price and EPS Surprise | CarMax, Inc. Quote
Factors Influencing This Quarter
CarMax aims at the used-car market and is one of the strongest among the peers. In fiscal 2017, used vehicle sales rose 6.7%, supported by an 8.3% year-over-year increase in used-car units sold. In third-quarter fiscal 2018, CarMax’s total used-vehicle unit sales rose 8.2%, which is likely to continue in the fiscal fourth quarter.
The Richmond, VA-based company is also following an aggressive store expansion scheme in order to grow its presence in the existing and new markets. It opened total six stores during the first two quarters of fiscal 2018. During the third quarter of fiscal 2018, CarMax opened five stores.
A significant increase in cash outflows from operations and rising capital expenditures might affect CarMax’s revenues.
For the soon-to-be-released quarterly results, the Zacks Consensus Estimate for net sales of used-vehicle retail is pegged at $3.6 billion, up from the fiscal third quarter’s net sales of $3.4 billion.
Similarly, the Zacks Consensus Estimate for net sales of the company’s wholesale vehicles stands at $499 million, down from the fiscal second quarter’s net sales of $552.8 million.
Also, the Zacks Consensus Estimate for Other sales and revenues is expected to be $135 million, up from the fiscal third quarter’s figure of $129 million.
Earnings Whispers
Our proven model does not conclusively show that CarMax is likely to beat earnings in this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: CarMax has an Earnings ESP of -3.51% as the Most Accurate estimate of 86 cents is lower than the Zacks Consensus Estimate of 89 cents. 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, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against Sell-rated stocks (#4 or 5) going into earnings announcement, especially when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are a few companies worth considering in the same space, with the right combination of elements to surpass estimates this quarter:
General Motors Company (GM - Free Report) has an Earnings ESP of +0.52% and a Zacks Rank of 1. It is expected to report upcoming earnings results on Apr 27. You can see the complete list of today’s Zacks #1 Rank stocks here.
BorgWarner Inc. (BWA - Free Report) has an Earnings ESP of +2.02% and a Zacks Rank of 2. It is expected to report upcoming earnings results on Apr 26.
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +2.57% and a Zacks Rank of 3. It is expected to report upcoming earnings results on May 1.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>