Carmax (KMX, $60.14) misses fiscal Q3 expectations, amidst high inflation
Carmax third-quarter results fell short of analysts’ expectations, amidst inflationary pressures dampening consumer demand.
The used-car retailer’s earnings fell -85% from a year ago to $0.24 per share in the quarter, missing the $0.70 expectation from Thomson Reuters survey.
Revenue was down -24% year-over-year to $6.51 billion in the quarter, vs. analysts’ expectations of $7.3 billion. Retail used units sold decreased -20.8% to 180,050 in the quarter ending November 30, while same-store used unit sales were down -22.4%. Average selling prices for its used cars were up +1.9% to $28,530.
CarMax CEO Bill Nash indicated that vehicle affordability challenges continued to affect the company’s third quarter unit sales performance amidst widespread inflationary pressures, rising interest rates, and low consumer confidence.
"External title data indicates that we gained market share on a year-to-date basis through October, though we've seen some recent loss of share. We are focused on profitable market share gains that can be sustained for the long-term," CarMax stated.
Citing its quarterly performance and market uncertainties, CarMax has suspended share repurchases.
KMX in -2.46% downward trend, falling for three consecutive days on October 03, 2023
Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where KMX declined for three days, in of 285 cases, the price declined further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on September 18, 2023. You may want to consider selling the stock, shorting the stock, or exploring put options on KMX as a result. In of 93 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for KMX turned negative on September 21, 2023. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 41 similar instances when the indicator turned negative. In of the 41 cases the stock turned lower in the days that followed. This puts the odds of success at .
KMX moved below its 50-day moving average on September 18, 2023 date and that indicates a change from an upward trend to a downward trend.
Bullish Trend Analysis
The RSI Indicator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an Uptrend is expected.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 8 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where KMX advanced for three days, in of 319 cases, the price rose further within the following month. The odds of a continued upward trend are .
KMX may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. KMX’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.843) is normal, around the industry mean (7.334). P/E Ratio (24.390) is within average values for comparable stocks, (24.652). Projected Growth (PEG Ratio) (1.077) is also within normal values, averaging (2.613). KMX has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.036). P/S Ratio (0.410) is also within normal values, averaging (82.789).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. KMX’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock worse than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a holding company whose subsidiaries sell and finance used motor vehicles
Industry SpecialtyStores
KMX and
Correlation & Price change
A.I.dvisor indicates that over the last year, KMX has been closely correlated with AN. These tickers have moved in lockstep 67% of the time. This A.I.-generated data suggests there is a high statistical probability that if KMX jumps, then AN could also see price increases.