CarMax Story

KMX -- USA Stock

USD 119.51 0.59 0.50%

Macroaxis Story

CarMax Quick Ratio is fairly stable at the moment as compared to the past year. CarMax reported Quick Ratio of 0.16 in 2019. Net Current Assets as percentage of Total Assets is likely to rise to 14.04 in 2020, whereas Net Income Per Employee is likely to drop slightly above 28.4 K in 2020. If you have been following CarMax you may be considering acquiring. Let's check if strong basic indicators will continue to push the price to rise for CarMax's investors. Will investors continue to hold, or should we expect a sell-off?

Published over three months ago

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How strong are CarMax (NYSE:KMX) basic indicators given the current rise?

CarMax is OVERVALUED at 98.50 per share with modest projections ahead. CarMax appears to be very steady, given 1 month investment horizon. CarMax Inc secures Sharpe Ratio (or Efficiency) of 0.17, which signifies that the company had 0.17% of return per unit of risk over the last month. Our standpoint towards foreseeing the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for CarMax Inc, which you can use to evaluate future volatility of the firm. Please makes use of CarMax Inc Downside Deviation of 1.92, risk adjusted performance of 0.0439, and Mean Deviation of 1.34 to double-check if our risk estimates are consistent with your expectations.

Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include CarMax income statement, its balance sheet, and the statement of cash flows. Potential CarMax investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although CarMax investors may use each financial statement separately, they are all related. The changes in CarMax's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on CarMax's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.

The goal of CarMax fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of CarMax performance into the future periods or doing a reasonable stock valuation. The intrinsic value of CarMax shares is the value that is considered the true value of the share. If the intrinsic value CarMax is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares CarMax.

Please read more on our fundamental analysis page.

What is CarMax Asset Breakdown?

CarMax Inc reports assets on its Balance Sheet. It represents the amount of CarMax resources that either has an existing economic value or will provide some form of benefits in the future. To get a better handle on how balance sheet or income statements item affect CarMax volatility, please check the breakdown of all its fundamentals

Are CarMax Earnings Expected to grow?

The future earnings power of CarMax involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of CarMax factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. CarMax stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of CarMax expected earnings.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.

It is good to see analyst projects for CarMax, but it might be worth checking our own buy vs. sell analysis

CarMax Gross Profit

CarMax Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing CarMax previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show CarMax Gross Profit growth over the last 10 years.

Please check Gross Profit in more details.

Exercise or conversion by Jon Daniels of 20129 shares of CarMax subject to Rule 16b-3

Legal trades by CarMax insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:

CarMax insider trading alert for exercise of stock options (right to buy) by Jon Daniels, SVP CAF, on 10th of February 2021. This event was filed by Carmax Inc with SEC on 2021-02-10. Statement of changes in beneficial ownership - SEC Form 4. Jon Daniels currently serves as senior vice president - carmax auto finance of CarMax Inc [view details]

Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking down CarMax Indicators

Many companies such as CarMax have both institutions investors and insiders sharing the ownership. Retail investors typically buy and sell stocks in round lots of 100 shares or more. Other other hand institutional investors are known to buy and sell in block trades of 10,000 shares or more. Let's take a look at how the ownership of CarMax is distributed among investors.

Ownership Allocation

CarMax holds a total of one hundred sixty-three million eighty thousand outstanding shares. The majority of CarMax Inc outstanding shares are owned by other corporate entities. These outside corporations are usually referred to as non-private investors looking to acquire positions in CarMax Inc to benefit from reduced commissions. Consequently, institutional investors are subject to a different set of regulations than regular investors in CarMax. Please pay attention to any change in the institutional holdings of CarMax Inc as this could imply that something significant has changed or about to change at the company. Also note that nearly four million eight hundred ninety-two thousand four hundred invesors are currently shorting CarMax expressing very little confidence in its future performance.

Institutions

102.56%

	Retail Investors	-2.98
	Insiders	0.42
	Institutions	102.56

Asset Utilization

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. CarMax has an asset utilization ratio of 133.47 percent. This suggests that the company is making $1.33 for each dollar of assets. An increasing asset utilization means that CarMax Inc is more efficient with each dollar of assets it utilizes for everyday operations.

Assets Non Current

15.1 B

Current Assets	3.38 Billion	18.18
Assets Non Current	15.12 Billion	81.28
Tax Assets	98.92 Million	0.53

CarMax implied volatility may change after the rise

The treynor ratio is down to -0.23 as of today. CarMax Inc has relatively low volatility with skewness of -0.29 and kurtosis of 1.41. However, we advise all investors to independently investigate CarMax Inc to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns.

Our Conclusion on CarMax

While some companies within the auto & truck dealerships industry are still a little expensive, even after the recent corrections, CarMax may offer a potential longer-term growth to investors. While some in two-three weeks oriented investors may not share our view, we believe it may not be a good time to pick up new shares of CarMax.

About Contributor

Achuva Shats is a Member of Macroaxs Editorial Board. Achuva writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce View Profile

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of CarMax Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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