CarMax (NYSE:KMX) Issues Earnings Results, Beats Estimates By $0.35 EPS

CarMax (NYSE:KMX) released its quarterly earnings data on Wednesday. The company reported $1.31 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.96 by $0.35, RTT News reports. The business had revenue of $8.01 billion for the quarter, compared to analysts’ expectations of $7.42 billion. CarMax had a return on equity of 6.64% and a net margin of 0.84%.The firm’s quarterly revenue was up 6.2% on a year-over-year basis. During the same period in the prior year, the firm posted $1.38 EPS.

Here are the key takeaways from CarMax’s conference call:

• CarMax said first-quarter momentum improved, with total sales up 6.2% to $8 billion and retail unit sales slightly higher year over year, despite tough comparisons. Management said pricing and marketing actions helped sales and expects the trend to continue.
• The company unveiled a new strategy built around four pillars: great offering, easy experience, add value on each transaction, and run lean. Executives emphasized better pricing, tighter digital-to-store integration, and more efficient operations as the main levers.
• SG&A fell 4% and leveraged by 7% per unit, with CarMax saying it is on track to hit its $200 million exit-rate savings target by fiscal 2027. Management said further efficiencies should help fund competitive pricing and business investment.
• CarMax Auto Finance penetration rose to 43.3%, up 150 basis points from last year, while CAF income was essentially stable at $140 million and credit losses were in line with expectations. The company also reiterated that full-spectrum lending remains a key long-term growth driver.
• Executives indicated they are managing GPU more dynamically rather than targeting a fixed level each quarter, with first-quarter GPU down less than previously guided. They expect some variability, but said the goal is to balance sales growth and profitability as pricing becomes more granular and market-based.

CarMax Price Performance

Shares of CarMax stock opened at $53.54 on Friday. The stock has a market cap of $7.59 billion, a P/E ratio of 34.99, a P/E/G ratio of 1.79 and a beta of 1.21. The company has a debt-to-equity ratio of 2.87, a quick ratio of 0.49 and a current ratio of 2.70. The stock’s fifty day moving average is $42.56 and its 200 day moving average is $42.56. CarMax has a one year low of $30.26 and a one year high of $71.99.

Institutional Inflows and Outflows

Institutional investors have recently made changes to their positions in the stock. AQR Capital Management LLC increased its holdings in CarMax by 151.8% in the 4th quarter. AQR Capital Management LLC now owns 7,930,345 shares of the company’s stock worth $306,429,000 after acquiring an additional 4,780,903 shares in the last quarter. SRS Investment Management LLC increased its stake in shares of CarMax by 1,717.5% in the fourth quarter. SRS Investment Management LLC now owns 5,637,803 shares of the company’s stock worth $217,845,000 after purchasing an additional 5,327,603 shares in the last quarter. Dimensional Fund Advisors LP increased its stake in shares of CarMax by 8.2% in the fourth quarter. Dimensional Fund Advisors LP now owns 3,985,895 shares of the company’s stock worth $154,023,000 after purchasing an additional 300,694 shares in the last quarter. Arrowstreet Capital Limited Partnership raised its position in shares of CarMax by 73.7% during the 3rd quarter. Arrowstreet Capital Limited Partnership now owns 3,522,923 shares of the company’s stock valued at $158,074,000 after purchasing an additional 1,494,205 shares during the period. Finally, Invesco Ltd. lifted its stake in shares of CarMax by 14.2% during the 3rd quarter. Invesco Ltd. now owns 3,425,737 shares of the company’s stock valued at $153,713,000 after buying an additional 426,809 shares in the last quarter.

Key Headlines Impacting CarMax

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: CarMax beat Q1 earnings and revenue estimates, with sales growth and cost control helping results. CarMax Q1 Earnings Beat Estimates on Revenue Growth, Cost Control
• Positive Sentiment: Stephens upgraded CarMax to Overweight and set a $66 price target, while Mizuho and JPMorgan also nudged targets higher, signaling improving analyst confidence. Stephens upgrade coverage
• Positive Sentiment: Analysts highlighted early signs that the new CEO’s focus on cost discipline, customer experience, and the company’s four-pillar reset could support a longer-term turnaround. KMX Stock Recoups Earnings Day Losses – Analysts Pour Praise On New CarMax CEO’s Focus On Cost And Customer Experience

Wall Street Analysts Forecast Growth

Several equities research analysts recently commented on the company. Argus raised CarMax to a “hold” rating in a research report on Thursday, April 16th. Bank of America lifted their price target on shares of CarMax from $40.00 to $45.00 and gave the stock an “underperform” rating in a research note on Wednesday. UBS Group assumed coverage on shares of CarMax in a research report on Wednesday, May 27th. They set a “neutral” rating and a $42.00 price objective on the stock. Truist Financial lifted their target price on shares of CarMax from $47.00 to $50.00 and gave the stock a “hold” rating in a research report on Thursday. Finally, Weiss Ratings reissued a “sell (d)” rating on shares of CarMax in a report on Wednesday, April 8th. Two research analysts have rated the stock with a Buy rating, thirteen have issued a Hold rating and five have assigned a Sell rating to the company’s stock. Based on data from MarketBeat, the company has a consensus rating of “Reduce” and a consensus target price of $46.13.

CarMax Company Profile

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.