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Virginia-based CarMax, Inc. (KMX) is a leading retailer of used vehicles and one of the nation's largest operators of wholesale vehicle auctions. Valued at a market cap of $11.5 billion, the company also provides automobile financing alternatives, the sale of extended warranties, car accessories, and vehicle repair services. It is expected to announce its fiscal Q3 earnings results on Thursday, Dec. 19.
Ahead of this event, analysts expect the used vehicle retailer to report a profit of $0.60 per share, up 15.4% from $0.52 per share in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in just one of the last four quarters while missing on three other occasions. In Q2, the company’s net EPS of $0.85 missed the consensus estimates by 1.2% but jumped 13.3% annually.
For fiscal 2025, analysts expect KMX to report an EPS of $2.99, down nearly 1% from $3.02 in fiscal 2024. Nonetheless, in fiscal 2026, EPS is expected to increase almost 24.8% year-over-year to $3.73.
Shares of KMX have declined 3.2% on a YTD basis, significantly underperforming both the S&P 500 Index's ($SPX) 22.1% rise and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 12.6% return over the same period.
Despite missing Wall Street’s earnings estimates, shares of KMX jumped 5% after its mixed Q2 earnings release on Sep. 26. The company’s reported revenue of $7.01 billion surpassed the consensus estimates of $6.85 billion but decreased slightly from a year ago. The revenue outperformance was primarily driven by a 5.1% annual increase in retail used vehicle unit sales. The company’s $106.1 million worth of share repurchase and strong gross profit expansion might have further contributed to its upward price movement.
Analysts' consensus view on CarMax’s stock is moderately optimistic, with a "Moderate Buy" rating overall. Among 17 analysts covering the stock, six recommend a "Strong Buy," three suggest a "Moderate Buy," five indicate a “Hold,” one suggests a “Moderate Buy,” and two indicate a “Strong Sell.” This configuration is slightly less bullish than three months ago, with seven analysts suggesting a "Strong Buy."
The average analyst price target for KMX is $79.28, indicating a 6.7% potential upside from the current levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
