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

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CarMax (KMX - Free Report) closed the most recent trading day at $95.43, moving +0.6% from the previous trading session. This change outpaced the S&P 500's 0.37% gain on the day. Elsewhere, the Dow gained 0.42%, while the tech-heavy Nasdaq added 0.56%.

Coming into today, shares of the used car dealership chain had gained 10.06% in the past month. In that same time, the Retail-Wholesale sector gained 2.79%, while the S&P 500 gained 4.42%.

Wall Street will be looking for positivity from KMX as it approaches its next earnings report date. The company is expected to report EPS of $1.14, up 4.59% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.62 billion, up 7.63% from the prior-year quarter.

KMX's full-year Zacks Consensus Estimates are calling for earnings of $5.29 per share and revenue of $19.76 billion. These results would represent year-over-year changes of +10.44% and +8.73%, respectively.

Any recent changes to analyst estimates for KMX should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. KMX is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, KMX currently has a Forward P/E ratio of 17.94. For comparison, its industry has an average Forward P/E of 19.33, which means KMX is trading at a discount to the group.

We can also see that KMX currently has a PEG ratio of 1.43. 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. The Automotive - Retail and Wholesale - Parts industry currently had an average PEG ratio of 1.59 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 59, which puts it in the top 24% 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.

To follow KMX in the coming trading sessions, be sure to utilize Zacks.com.


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