CarMax Story

<div class='circular--portrait' style='background:#006400;color: #F5FFFA;font-size:3em;'>KMX</div>
KMX -- USA Stock  

USD 130.10  0.13  0.10%

CarMax Inc is scheduled to announce its earnings today. The next earnings report is expected on the 18th of June 2021. The stock experiences an active downward rally. While many of us are getting excited about consumer cyclical space, we are going to break down the feasibility of acquiring CarMax. We will evaluate why we are still optimistic in anticipation of a recovery.
Published over two weeks ago
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Is CarMax (NYSE:KMX) outlook optimistic based on the current analyst consensus?
On a scale of 0 to 100, CarMax holds a performance score of 13. The firm shows a Beta (market volatility) of 1.5458, which signifies a somewhat significant risk relative to the market. Let's try to break down what CarMax's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, CarMax will likely underperform. Although it is vital to follow CarMax Inc historical returns, it is good to be conservative about what you can do with the information regarding equity current trending patterns. The philosophy towards foreseeing future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By analyzing CarMax Inc technical indicators, you can presently evaluate if the expected return of 0.48% will be sustainable into the future. Please makes use of CarMax Inc jensen alpha, potential upside, as well as the relationship between the Potential Upside and accumulation distribution to make a quick decision on whether CarMax price patterns will revert.
What is the right price you would pay to acquire a share of CarMax? For most investors, it would be the price that gives them a wide margin of safety to have minimal downside risk. In other words, most investors are always looking for undervalued stocks. Even if the future performance is not entirely as expected, the loss of holding it is minimized, and the downside risk is negated.
Please read more on our stock advisor page.

What is happening with CarMax Inc this year

Annual and quarterly reports issued by CarMax Inc are formal financial statements that are published yearly and quarterly and sent to CarMax stockholders. The reports show and break down the current year's ongoing operations and discuss plans for the upcoming year. Annual reports have been a requirement from the Securities and Exchange Commission (SEC) for businesses owned by the public since 1934.
Companies such as CarMax often view their annual report as an effective marketing tool to disseminate their perspective on company future earnings or innovations. With this in mind, many companies devote large sums of money to making their reports attractive and informative. In such instances, the annual report becomes a forum through which a company can communicate to the general public any number of topics that may or may not be directly related to the actual data published in the reports.

How CarMax utilizes its cash?

To perform a cash flow analysis of CarMax, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash CarMax is receiving and how much cash it distributes out in a given period. The CarMax cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
CarMax Net Cash Flow from Operations is fairly stable at the moment as compared to the past year. CarMax reported Net Cash Flow from Operations of (272.1 Million) in 2020

Exercise or conversion by Thomas Folliard of 185120 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 Folliard, the corporate stakeholder, on 14th of April 2021. This event was filed by Carmax Inc with SEC on 2021-04-14. Statement of changes in beneficial ownership - SEC Form 4. Thomas Folliard currently serves as non-executive chairman of the board 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 it down

Earning per share calculations of CarMax is based on official Zacks consensus of 6 analysts regarding CarMax's future annual earnings. Given the historical accuracy of 86.43%, the future earnings per share of the company is estimated to be 4.2867 with the lowest and highest values of 3.74 and 4.66, respectively. Please note that this consensus of annual earnings estimates for the firm is an estimate of EPS before non-recurring items and including employee stock options expenses.

Is CarMax a risky opportunity?

Let's check the volatility. CarMax is looking slightly risky at this time. Whether you invest your money or manage your clients' funds, remember that it is easy to forget that behind CarMax (NYSE:KMX) stock is an actual business venture. So, do not let stock picking become an abstract concept by ignoring the elementary risk calculations. acquiring a share of a CarMax stock makes you a part-owner of that company.

CarMax Inc Current Consensus

Here is the current trade recommendation based on an ongoing consensus estimate among financial analysis covering CarMax Inc. The CarMax consensus assessment is calculated by taking the average estimates from all of the analysts covering CarMax

Strong Buy
7
Buy
2
Hold
1
Strong Sell
1
Strong Buy763.64
Buy218.18
Hold19.09
Sell00.0
Strong Sell19.09

Time to opt out of of CarMax?

The downside variance is down to 3.21 as of today. CarMax Inc has relatively low volatility with skewness of 0.98 and kurtosis of 2.37. 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. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure CarMax's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact CarMax's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Conclusion on CarMax

While some firms in the auto & truck dealerships industry are either recovering or due for a correction, CarMax may not be as strong as the others in terms of longer-term growth potentials. While some short-term oriented investors may not share our view, we believe it may be a good time to purchase new shares of 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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