CarMax (NYSE:KMX) Shares Gap Up After Strong Earnings

Shares of CarMax, Inc. (NYSE:KMX) gapped up prior to trading on Friday following a better than expected earnings announcement. The stock had previously closed at $64.33, but opened at $70.27. CarMax shares last traded at $67.08, with a volume of 2,898,134 shares changing hands.

The company reported $1.38 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.18 by $0.20. The firm had revenue of $7.55 billion for the quarter, compared to analyst estimates of $7.58 billion. CarMax had a return on equity of 8.22% and a net margin of 1.90%. The business’s revenue was up 6.1% on a year-over-year basis. During the same quarter last year, the company posted $0.97 earnings per share.

Wall Street Analyst Weigh In

A number of research firms have recently issued reports on KMX. Robert W. Baird dropped their target price on CarMax from $95.00 to $90.00 and set an “outperform” rating on the stock in a report on Friday, April 11th. Cfra Research upgraded shares of CarMax to a “strong-buy” rating in a research report on Thursday, April 10th. Royal Bank Of Canada restated an “underperform” rating on shares of CarMax in a research note on Monday, April 21st. Stephens raised shares of CarMax from an “equal weight” rating to an “overweight” rating and lifted their target price for the company from $86.00 to $90.00 in a report on Wednesday, March 26th. Finally, Evercore ISI cut their price target on shares of CarMax from $85.00 to $84.00 and set an “outperform” rating for the company in a report on Wednesday, May 28th. Three investment analysts have rated the stock with a sell rating, four have issued a hold rating, seven have assigned a buy rating and one has issued a strong buy rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of “Hold” and a consensus price target of $85.82.

Insider Activity

In other news, Director Mitchell D. Steenrod purchased 1,300 shares of the company’s stock in a transaction dated Thursday, April 24th. The stock was acquired at an average price of $65.49 per share, for a total transaction of $85,137.00. Following the completion of the transaction, the director now directly owns 33,577 shares in the company, valued at $2,198,957.73. This represents a 4.03% increase in their position. The acquisition was disclosed in a filing with the SEC, which is available through this link. Insiders own 1.70% of the company’s stock.

Institutional Trading of CarMax

Institutional investors and hedge funds have recently modified their holdings of the business. Zions Bancorporation National Association UT purchased a new stake in shares of CarMax in the first quarter valued at $27,000. Cromwell Holdings LLC raised its position in shares of CarMax by 104.8% in the fourth quarter. Cromwell Holdings LLC now owns 424 shares of the company’s stock valued at $35,000 after buying an additional 217 shares during the last quarter. Accent Capital Management LLC purchased a new position in shares of CarMax during the first quarter valued at approximately $34,000. Strengthening Families & Communities LLC boosted its position in CarMax by 93.1% during the first quarter. Strengthening Families & Communities LLC now owns 531 shares of the company’s stock worth $39,000 after acquiring an additional 256 shares during the last quarter. Finally, Ameriflex Group Inc. purchased a new stake in CarMax in the 4th quarter worth approximately $53,000.

CarMax Price Performance

The company’s 50 day simple moving average is $65.60 and its 200 day simple moving average is $75.58. The company has a current ratio of 2.31, a quick ratio of 0.52 and a debt-to-equity ratio of 2.91. The stock has a market capitalization of $10.32 billion, a PE ratio of 21.10, a PEG ratio of 1.07 and a beta of 1.38.

About CarMax

CarMax, Inc, through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. It operates in two segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; used vehicle auctions; extended protection plans to customers at the time of sale; and reconditioning and vehicle repair services.