7 Analysts Assess CarMax: What You Need To Know

In the last three months, 7 analysts have published ratings on CarMax KMX, offering a diverse range of perspectives from bullish to bearish.

The following table summarizes their recent ratings, shedding light on the changing sentiments within the past 30 days and comparing them to the preceding months.

Analysts have set 12-month price targets for CarMax, revealing an average target of $92.43, a high estimate of $105.00, and a low estimate of $72.00. Witnessing a positive shift, the current average has risen by 6.41% from the previous average price target of $86.86.

Decoding Analyst Ratings: A Detailed Look

A clear picture of CarMax's perception among financial experts is painted with a thorough analysis of recent analyst actions. The summary below outlines key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: In response to dynamic market conditions and company performance, analysts update their recommendations. Whether they 'Maintain', 'Raise', or 'Lower' their stance, it signifies their reaction to recent developments related to CarMax. This insight gives a snapshot of analysts' perspectives on the current state of the company.
• Rating: Delving into assessments, analysts assign qualitative values, from 'Outperform' to 'Underperform'. These ratings communicate expectations for the relative performance of CarMax compared to the broader market.
• Price Targets: Analysts predict movements in price targets, offering estimates for CarMax's future value. Examining the current and prior targets offers insights into analysts' evolving expectations.

Capture valuable insights into CarMax's market standing by understanding these analyst evaluations alongside pertinent financial indicators. Stay informed and make strategic decisions with 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's Economic Impact: An Analysis

Market Capitalization: Exceeding industry standards, the company's market capitalization places it above industry average in size relative to peers. This emphasizes its significant scale and robust market position.

Revenue Growth: CarMax's remarkable performance in 3 months is evident. As of 30 November, 2024, the company achieved an impressive revenue growth rate of 1.22%. This signifies a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Consumer Discretionary sector.

Net Margin: CarMax's financial strength is reflected in its exceptional net margin, which exceeds industry averages. With a remarkable net margin of 2.02%, the company showcases strong profitability and effective cost management.

Return on Equity (ROE): The company's ROE is a standout performer, exceeding industry averages. With an impressive ROE of 2.02%, the company showcases effective utilization of equity capital.

Return on Assets (ROA): CarMax's ROA stands out, surpassing industry averages. With an impressive ROA of 0.46%, the company demonstrates effective utilization of assets and strong financial performance.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 3.09.

The Basics of Analyst Ratings

Experts in banking and financial systems, analysts specialize in reporting for specific stocks or defined sectors. Their comprehensive research involves attending company conference calls and meetings, analyzing financial statements, and engaging with insiders to generate what are known as analyst ratings for stocks. Typically, analysts assess and rate each stock once per quarter.

In addition to their assessments, some analysts extend their insights by offering predictions for key metrics such as earnings, revenue, and growth estimates. This supplementary information provides further guidance for traders. It is crucial to recognize that, despite their specialization, analysts are human and can only provide forecasts based on their beliefs.

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