This story originally appeared on Zacks
CarMax (KMX) closed the most recent trading day at $108.48, moving -1.91% from the previous trading session. This change lagged the S&P 500’s daily loss of 1.9%. Elsewhere, the Dow lost 1.43%, while the tech-heavy Nasdaq added 0.06%.
Heading into today, shares of the used car dealership chain had lost 5.86% over the past month, lagging the Retail-Wholesale sector’s loss of 2.93% and the S&P 500’s loss of 3.39% in that time.
CarMax will be looking to display strength as it nears its next earnings release. In that report, analysts expect CarMax to post earnings of $1.42 per share. This would mark year-over-year growth of 11.81%. Our most recent consensus estimate is calling for quarterly revenue of $7.86 billion, up 52.21% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.40 per share and revenue of $31.85 billion. These totals would mark changes of +63.72% and +68.06%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for CarMax. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.91% higher. CarMax is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, CarMax is currently trading at a Forward P/E ratio of 14.95. For comparison, its industry has an average Forward P/E of 17.4, which means CarMax is trading at a discount to the group.
Investors should also note that KMX has a PEG ratio of 0.94 right now. 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. KMX’s industry had an average PEG ratio of 1.34 as of yesterday’s close.
The Automotive – Retail and Wholesale – Parts industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 101, putting it in the top 40% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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.
Just Released: Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022?
From inception in 2012 through 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% versus the S&P 500’s +348.7%. Now our Director of Research has combed through 4,000 companies covered by the Zacks Rank and has handpicked the best 10 tickers to buy and hold. Don’t miss your chance to get in…because the sooner you do, the more upside you stand to grab.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
CarMax, Inc. (KMX): Free Stock Analysis Report
To read this article on Zacks.com click here.