CarMax (NYSE:KMX) Shares Gap Down – Here’s Why

CarMax, Inc. (NYSE:KMX)’s stock price gapped down prior to trading on Wednesday . The stock had previously closed at $52.11, but opened at $49.97. CarMax shares last traded at $48.8740, with a volume of 1,799,592 shares changing hands.

Trending Headlines about CarMax

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: CarMax reported fiscal Q1 earnings of $1.31 per share, well above the $0.94 analyst estimate, and revenue of $8.01 billion also topped expectations. Article Title
• Positive Sentiment: Management highlighted a new strategic framework under CEO Keith Barr, and the company said higher used-vehicle prices and stronger wholesale demand helped drive the revenue beat. Article Title
• Positive Sentiment: Truist Financial raised its price target on CarMax to $47 from $37, reflecting improved expectations even while keeping a Hold rating. Article Title
• Neutral Sentiment: Several market reports note that the stock reacted to the earnings release and early investor focus is on whether the company’s strategy can sustain growth and improve profitability. Article Title
• Negative Sentiment: Profitability remains under pressure because CarMax used price cuts to support sales, which weighed on margins and offset some of the benefit from stronger revenue. Article Title
• Negative Sentiment: Despite the earnings beat, some coverage says investors are selling the stock because pricing strategy and margin pressure raised concerns about the durability of earnings growth. Article Title

Analyst Upgrades and Downgrades

A number of equities analysts have weighed in on KMX shares. Bank of America started coverage on shares of CarMax in a research report on Wednesday, April 15th. They issued an “underperform” rating and a $40.00 price objective for the company. Weiss Ratings reissued a “sell (d)” rating on shares of CarMax in a research report on Wednesday, April 8th. Stephens upped their price objective on shares of CarMax from $39.00 to $43.00 and gave the company an “equal weight” rating in a research report on Thursday, April 2nd. Truist Financial upped their price objective on shares of CarMax from $37.00 to $47.00 and gave the company a “hold” rating in a research report on Tuesday. Finally, Wall Street Zen upgraded shares of CarMax from a “sell” rating to a “hold” rating in a research note on Saturday. One investment analyst has rated the stock with a Buy rating, fourteen have issued a Hold rating and five have assigned a Sell rating to the company. Based on data from MarketBeat.com, the company currently has a consensus rating of “Reduce” and a consensus price target of $42.40.

CarMax Trading Down 7.2%

The firm has a market cap of $6.86 billion, a price-to-earnings ratio of 30.21, a price-to-earnings-growth ratio of 1.97 and a beta of 1.21. The business’s 50 day moving average price is $42.26 and its 200-day moving average price is $42.39. The company has a debt-to-equity ratio of 2.93, a quick ratio of 0.49 and a current ratio of 2.20.

CarMax (NYSE:KMX) last issued its earnings results on Wednesday, June 17th. The company reported $1.31 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.94 by $0.37. The business had revenue of $8.01 billion for the quarter, compared to analyst estimates of $7.42 billion. CarMax had a net margin of 0.96% and a return on equity of 7.00%. The company’s revenue for the quarter was up 6.2% on a year-over-year basis. During the same quarter in the prior year, the business posted $1.38 EPS. Equities analysts expect that CarMax, Inc. will post 2.3 EPS for the current year.

Institutional Investors Weigh In On CarMax

Institutional investors and hedge funds have recently bought and sold shares of the business. Huntington National Bank lifted its holdings in CarMax by 62.4% in the fourth quarter. Huntington National Bank now owns 690 shares of the company’s stock worth $27,000 after acquiring an additional 265 shares during the last quarter. CYBER HORNET ETFs LLC bought a new position in CarMax in the second quarter worth about $28,000. Wellington Grp LLC lifted its holdings in CarMax by 6,500.0% in the first quarter. Wellington Grp LLC now owns 726 shares of the company’s stock worth $30,000 after acquiring an additional 715 shares during the last quarter. MUFG Securities EMEA plc bought a new position in CarMax in the second quarter worth about $30,000. Finally, Advisory Services Network LLC bought a new position in CarMax in the third quarter worth about $32,000.

About CarMax

CarMax (NYSE: KMX) is a leading retailer of used vehicles in the United States, offering customers a streamlined, no-haggle purchasing experience. The company’s inventory spans a broad range of makes and models, each of which undergoes a comprehensive inspection process before being offered for sale. Customers can shop in person at CarMax’s retail locations or browse the company’s online platform, which provides detailed vehicle histories, virtual tours and contactless purchasing options.

Originally launched in 1993 as a division of Circuit City, CarMax became an independent, publicly traded company in 1997.