Latest news with #CarMax
Axios
an hour ago
- Automotive
- Axios
CarMax says tariff fears juiced used car demand in April
Driving the news: CarMax reported Friday that it sold 9% more used vehicles to retail customers in the most recent quarter than it did a year earlier, leading to a 7.5% rise in retail revenue. Tariffs may have played a part. CEO William Nash noted a demand uptick correlated to tariff speculation, with April coming in as the strongest month in the company's quarter — but stressed the business was already growing before that. Between the lines: Nash acknowledged that car shoppers are worried about price hikes and the resumption of federal student loan obligations. About 30% of the company's customers have student loans. "But I don't think it's necessarily showed up so much in the buying habits at this point," he said in terms of pricing. CarMax shares closed up 6.6% Friday on the report. Zoom out: Industrywide, wholesale used vehicle prices — the cars sold to other dealers — rose 1.7% from May through the first half of June, according to Cox Automotive's Manheim Used Vehicle Index. The bottom line: Tariffs haven't warped the used car economy ... at least not yet.
Yahoo
an hour ago
- Automotive
- Yahoo
CarMax pops on Q1 earnings: The journey to catch up to Carvana
CarMax (KMX) stock gains after reporting an earnings beat driven by strong demand for used vehicles. Wedbush Securities managing director of equity research Scott Devitt outlines the results and the used car retailer's efforts to catch up to Carvana (CVNA). To watch more expert insights and analysis on the latest market action, check out more Catalysts here. CarMax is rising after topping first quarter expectations with sales rising nearly 6% from a year earlier boosted by strong demand for used vehicles. Joining me now, we've got Scott David, who is the Vedbush Security's managing director of equity research. Great to have you here with us. So, you have an outperform rating and a $90 price target on the stock. How are you looking at CarMax right now? I thought it was a good quarter. You know, retail units were up 9%. Um, it was a record high gross profit dollar per unit. Um, so it was a good quarter. You know, this company is uh constantly playing catch up with Carvana. And um, I think Carvana is making it a better company, but it's a slow progression. You know, and they've shown some some signs here of strength. I think the asset long-term is mispriced favorably, but um, you know, but it but it's uh it's kind of a steady as she goes and they have to keep executing. You know, we're continuing to look across this gross profit and and I wonder your evaluation of their gross profit and it did increase by 13% in the most recent quarter driven by higher unit volumes, strong unit margin performance here. But so much of this business is making sure that when they are purchasing cars as well that they're purchasing cars that are favorable enough for them to then be able to flip and add on that margin. What's your own assessment of the margin run rate that they're going to be able to achieve over time here and and grow to even get more shareholder value returned? So what's happened in the past 12 months is that retail prices have been rising faster than wholesale prices, which is good for a retailer like CarMax because they capture that spread. I think what you're going to see potentially over the next 12 months is that um, that that gap tightening a little bit, which will be, you know, somewhat of a headwind, but from a sourcing standpoint and a scale standpoint, it's really kind of a two-player game. You know, 90% of this industry is sold by small mom and pop still. And CarMax and and particularly Carvana, you know, are consolidating the industry at the at the kind of head of the industry. Um, what's notable, you know, is within the next three years that Carvana is going to start to approach and potentially exceed CarMax units. So that'll be important to watch. I think both companies can win. Um, but there's one, you know, performing at an A+ level and and and that's Carvana. And I think, you know, CarMax is probably a BB+ right now and the rest of the industry is a C.
Yahoo
2 hours ago
- Automotive
- Yahoo
CarMax (KMX) Q1 Earnings and Revenues Beat Estimates
CarMax (KMX) came out with quarterly earnings of $1.38 per share, beating the Zacks Consensus Estimate of $1.18 per share. This compares to earnings of $0.97 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 16.95%. A quarter ago, it was expected that this used car dealership chain would post earnings of $0.64 per share when it actually produced earnings of $0.64, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates two times. CarMax , which belongs to the Zacks Automotive - Retail and Wholesale - Parts industry, posted revenues of $7.55 billion for the quarter ended May 2025, surpassing the Zacks Consensus Estimate by 0.40%. This compares to year-ago revenues of $7.11 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. CarMax shares have lost about 21.3% since the beginning of the year versus the S&P 500's gain of 1.7%. While CarMax has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for CarMax: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $1.06 on $7.22 billion in revenues for the coming quarter and $3.76 on $27.53 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Retail and Wholesale - Parts is currently in the top 30% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the broader Zacks Retail-Wholesale sector, Domino's Pizza (DPZ), is yet to report results for the quarter ended June 2025. This pizza chain is expected to post quarterly earnings of $3.94 per share in its upcoming report, which represents a year-over-year change of -2.2%. The consensus EPS estimate for the quarter has been revised 0.1% lower over the last 30 days to the current level. Domino's Pizza's revenues are expected to be $1.14 billion, up 3.9% from the year-ago quarter. 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 Domino's Pizza Inc (DPZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
2 hours ago
- Automotive
- Yahoo
CarMax's (NYSE:KMX) Q2 Earnings Results: Revenue In Line With Expectations, Stock Soars
Used automotive vehicle retailer Carmax (NYSE:KMX) met Wall Street's revenue expectations in Q2 CY2025, with sales up 6.1% year on year to $7.55 billion. Its GAAP profit of $1.38 per share was 18.3% above analysts' consensus estimates. Is now the time to buy CarMax? Find out in our full research report. Revenue: $7.55 billion vs analyst estimates of $7.57 billion (6.1% year-on-year growth, in line) EPS (GAAP): $1.38 vs analyst estimates of $1.17 (18.3% beat) Adjusted EBITDA: $300.1 million vs analyst estimates of $359.2 million (4% margin, 16.5% miss) Operating Margin: 3.1%, in line with the same quarter last year Free Cash Flow was $144 million, up from -$221.6 million in the same quarter last year Locations: 250 at quarter end, up from 245 in the same quarter last year Same-Store Sales rose 6.6% year on year (-6.1% in the same quarter last year, beat vs expectations of up 6.3%) Market Capitalization: $9.8 billion 'We delivered our fourth consecutive quarter of positive retail comps and double-digit year-over-year earnings per share growth. These results highlight the strength of our earnings growth model, which is underpinned by our best-in-class omni-channel experience, the diversity of our business, and our sharp focus on execution,' said Bill Nash, president and chief executive officer. Known for its transparent, customer-centric approach and wide selection of vehicles, Carmax (NYSE:KMX) is the largest automotive retailer in the United States. A company's long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. With $26.79 billion in revenue over the past 12 months, CarMax is one of the larger companies in the consumer retail industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because there are only a finite number of places to build new stores, making it harder to find incremental growth. For CarMax to boost its sales, it likely needs to adjust its prices or lean into foreign markets. As you can see below, CarMax's sales grew at a tepid 6.1% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts). This quarter, CarMax grew its revenue by 6.1% year on year, and its $7.55 billion of revenue was in line with Wall Street's estimates. Looking ahead, sell-side analysts expect revenue to grow 4.3% over the next 12 months, a slight deceleration versus the last six years. We still think its growth trajectory is satisfactory given its scale and suggests the market is baking in success for its products. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. The number of stores a retailer operates is a critical driver of how quickly company-level sales can grow. CarMax sported 250 locations in the latest quarter. Over the last two years, it has opened new stores quickly, averaging 2.6% annual growth. This was faster than the broader consumer retail sector. When a retailer opens new stores, it usually means it's investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance. A company's store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it's prudent to close some locations and use the money in other ways. Same-store sales gives us insight into this topic because it measures organic growth for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year. CarMax's demand has been shrinking over the last two years as its same-store sales have averaged 2% annual declines. This performance is concerning - it shows CarMax artificially boosts its revenue by building new stores. We'd like to see a company's same-store sales rise before it takes on the costly, capital-intensive endeavor of expanding its store base. In the latest quarter, CarMax's same-store sales rose 6.6% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum. We enjoyed seeing CarMax beat analysts' same-store sales and gross margin expectations this quarter. This led to nice EPS outperformance versus Wall Street's estimates. Overall, this was a solid quarter. The stock traded up 9.3% to $70.30 immediately after reporting. So should you invest in CarMax right now? If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free. 擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
Yahoo
3 hours ago
- Automotive
- Yahoo
CarMax pops on Q1 earnings: The journey to catch up to Carvana
CarMax (KMX) stock gains after reporting an earnings beat driven by strong demand for used vehicles. Wedbush Securities managing director of equity research Scott Devitt outlines the results and the used car retailer's efforts to catch up to Carvana (CVNA). To watch more expert insights and analysis on the latest market action, check out more Catalysts here. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
