Breaking Down CarMax: 12 Analysts Share Their Views

Ratings for CarMax KMX were provided by 12 analysts in the past three months, showcasing a mix of bullish and bearish perspectives.

The table below provides a snapshot of their recent ratings, showcasing how sentiments have evolved over the past 30 days and comparing them to the preceding months.

The 12-month price targets, analyzed by analysts, offer insights with an average target of $82.17, a high estimate of $95.00, and a low estimate of $65.00. Surpassing the previous average price target of $78.92, the current average has increased by 4.12%.

Decoding Analyst Ratings: A Detailed Look

The analysis of recent analyst actions sheds light on the perception of CarMax by financial experts. The following summary presents key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: Analysts frequently update their recommendations based on evolving market conditions and company performance. Whether they 'Maintain', 'Raise' or 'Lower' their stance, it reflects their reaction to recent developments related to CarMax. This information provides a snapshot of how analysts perceive the current state of the company.
• Rating: Offering insights into predictions, analysts assign qualitative values, from 'Outperform' to 'Underperform'. These ratings convey expectations for the relative performance of CarMax compared to the broader market.
• Price Targets: Analysts set price targets as an estimate of a stock's future value. Comparing the current and prior price targets provides insight into how analysts' expectations have changed over time. This information can be valuable for investors seeking to understand consensus views on the stock's potential future performance.

For valuable insights into CarMax's market performance, consider these analyst evaluations alongside crucial financial indicators. Stay well-informed and make prudent decisions using our Ratings Table.

Stay up to date on CarMax analyst ratings.

Unveiling the Story Behind CarMax

CarMax sells, finances, and services used and new cars through a chain of around 250 used retail stores. It was formed in 1993 as a unit of Circuit City and spun off into an independent company in late 2002. Used-vehicle sales typically account for about 83% of revenue (79% in fiscal 2024 due to the chip shortage) and wholesale about 13% (19% in fiscal 2024), with the remaining portion composed of extended service plans and repair. In fiscal 2024, the company retailed and wholesaled 765,572, and 546,331 used vehicles, respectively. CarMax is the largest used-vehicle retailer in the US but still estimates that it had only about 3.7% US market share of vehicles 0-10 years old in 2023. It seeks over 5% share a few years from now. CarMax is based in Richmond, Virginia.

CarMax: Delving into Financials

Market Capitalization: Surpassing industry standards, the company's market capitalization asserts its dominance in terms of size, suggesting a robust market position.

Revenue Challenges: CarMax's revenue growth over 3 months faced difficulties. As of 31 August, 2024, the company experienced a decline of approximately -0.85%. This indicates a decrease in top-line earnings. When compared to others in the Consumer Discretionary sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Net Margin: CarMax's net margin surpasses industry standards, highlighting the company's exceptional financial performance. With an impressive 1.89% net margin, the company effectively manages costs and achieves strong profitability.

Return on Equity (ROE): The company's ROE is below industry benchmarks, signaling potential difficulties in efficiently using equity capital. With an ROE of 2.15%, the company may need to address challenges in generating satisfactory returns for shareholders.

Return on Assets (ROA): CarMax's ROA stands out, surpassing industry averages. With an impressive ROA of 0.49%, the company demonstrates effective utilization of assets and strong financial performance.

Debt Management: CarMax's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 3.11.

The Significance of Analyst Ratings Explained

Analysts work in banking and financial systems and typically specialize in reporting for stocks or defined sectors. Analysts may attend company conference calls and meetings, research company financial statements, and communicate with insiders to publish "analyst ratings" for stocks. Analysts typically rate each stock once per quarter.

Analysts may supplement their ratings with predictions for metrics like growth estimates, earnings, and revenue, offering investors a more comprehensive outlook. However, investors should be mindful that analysts, like any human, can have subjective perspectives influencing their forecasts.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.