CarMax Story

<div class='circular--portrait' style='background:#FF6600;color: #FFFAFA;font-size:3em;'>KMX</div>
KMX -- USA Stock  

USD 118.64  1.65  1.37%

CarMax Inc is scheduled to announce its earnings today. The next earnings report is expected on the 1st of April 2021. 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. Although many aggressive traders are getting into consumer cyclical space, CarMax Inc may or may not be your first choice. We will inspect if it could be a much better year for CarMax shareholders.
Published over a month ago
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Will CarMax (NYSE:KMX) debt increase in January
The company has 15.83 B in debt with debt to equity (D/E) ratio of 3.98, meaning that the entity heavily relies on borrowing funds for operations. CarMax Inc has a current ratio of 2.66, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. About 101.0% of the company shares are owned by institutional investors. The book value of CarMax was now reported as 24.26. CarMax Inc has Price/Earnings To Growth (PEG) ratio of 2.0. The entity had not issued any dividends in recent years. The firm had 2:1 split on the 27th of March 2007.
CarMax financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of CarMax, including all of CarMax's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of CarMax assets, the company is considered highly leveraged. Understanding the composition and structure of overall CarMax debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding CarMax Total Debt

CarMax Inc liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. CarMax Inc has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on CarMax balance sheet include debt obligations and money owed to different CarMax vendors, workers, and loan providers. Below is the chart of CarMax main long-term debt accounts currently reported on its balance sheet.
You can use CarMax Inc financial leverage analysis tool to get a better grip on understanding its financial position

How important is CarMax's Liquidity

CarMax financial leverage refers to using borrowed capital as a funding source to finance CarMax Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. CarMax financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between CarMax's total debt and its cash.

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

Exercise or conversion by Thomas Reedy of 35321 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 Thomas Reedy, EVP of Finance, on 22nd of January 2021. This event was filed by Carmax Inc with SEC on 2021-01-14. Statement of changes in beneficial ownership - SEC Form 4. Thomas Reedy currently serves as chief financial officer, executive vice president 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

The entity reported the last year's revenue of 19.48 B. Total Income to common stockholders was 689.76 M with profit before taxes, overhead, and interest of 3.18 B.

Liabilities Breakdown

Current Liabilities
13.4 B
Long-Term Liabilities
Total Liabilities14.8 Billion
Current Liabilities1.35 Billion
Long-Term Liabilities13.45 Billion
Tax Liabilities1.7 Million

CarMax implied volatility may change after the rise

The value at risk is down to -2.58 as of today. CarMax Inc exhibits very low volatility with skewness of -1.41 and kurtosis of 6.15. However, we advise investors to further study CarMax Inc technical indicators to make sure all market info is available and is reliable.

While many other companies in the auto & truck dealerships industry are either recovering or due for a correction, CarMax may not be performing as strong as the other in terms of long-term growth potentials. With an optimistic outlook on your 30 days horizon, it may be a good time to buy new shares of CarMax or increase your existing holdings in the Stock as it seems the potential growth has not yet been fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to CarMax.

About Contributor

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 Ellen Johnson 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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