Earnings Preview: CarMax

| About: CarMax Group (KMX)
This article is now exclusive for PRO subscribers.

CarMax, Inc. (NYSE:KMX), through its subsidiaries, operates as a retailer of used vehicles in the United States. It also sells vehicles that do not meet its retail standards to licensed dealers through on-site wholesale auctions, as well as sells new vehicles under franchise agreements.

It is scheduled to report its Q1 2013 results on June 21, 2012, before the market opens.

Technical Overview

Key Metrics

  • Market Cap: 6.32B
  • 52-week trading range: 22.77 - 35.17
  • Trailing P/E: 15.46
  • Forward P/E: 13.24
  • Price/Sales: 0.60
  • Price/Book: 2.32
  • PEG Ratio: 1.12
  • Total Debt: 5.05B
  • Annual dividend yield: N/A
  • Return on Equity: 16.85%
  • Return on Assets: 5.66%

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last quarters. In the last quarter it reported $0.41 EPS, beating analyst estimates of $0.40.

The consensus EPS is $0.54 based on 13 analysts' estimates, down from $0.55 a year ago. Revenue estimates are $2.84B, up from $2.68B a year ago. The median target price by analysts for the stock is $38.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On February 3, 2012, the company was downgraded from Outperform to Sector Perform at RBC Capital Mkts.

Latest Developments

  • On April 16, 2012, CarMax, Inc., the nation's largest retailer of used cars, announced today that The CarMax Foundation granted more than $2.4 million to nonprofits in the fiscal year that ended on February 29, which is the largest annual donation since its inception in 2003. Our largest grant total before this was $2.2 million in 2008.


CarMax Inc. operates in Auto Dealerships industry. The company could be compared to Asbury Automotive Group, Inc. (NYSE:ABG), AutoNation Inc. (NYSE:AN), Penske Automotive Group, Inc. (NYSE:PAG), and Sonic Automotive Inc. (NYSE:SAH). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

KMX Chart

KMX data by YCharts

Competitors' Latest Development

  • On April 23, 2012, Sonic Automotive, Inc. announced that for fiscal 2012 it expects continuing operations diluted earnings per share (NYSEARCA:EPS) to be in the range of $1.55-$1.65.
  • On March 23, 2012, AutoNation, Inc. announced that its Board of Directors has authorized the repurchase of up to an additional $250 million of the Company's common stock.
  • On March 21, 2012, Sonic Automotive, Inc. announced a partnership with Lextech Global Services. The partnership engages Lextech as Sonic's Mobile Business Unit (MBU) which allows Sonic to design, develop and deploy mobile applications at a pace to keep up with business demands.
  • On February 24, 2012, Mercedes-Benz USA and Sonic Automotive, Inc. announced settlement of all legal disputes between the two companies effective immediately. Both companies declined to provide details of the settlement.
  • On January 31, 2012, Penske Automotive Group, Inc. announced that its Board of Directors has approved an 11% increase in the Company's dividend to $0.10 per share. The dividend is payable on March 1, 2012, to shareholders of record on February 10, 2012.
  • On January 28, 2012, AutoNation, Inc. announced the pricing of $350.0 million aggregate principal amount of senior unsecured notes due 2020 at 5.500%. The Company intends to use the net proceeds from the offering of the notes to reduce borrowings under the Company's existing revolving credit facility and to pay the related transaction fees and expenses.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.