Last Updated: 17 Oct 2024
Executive Summary
CarMax Inc. (KMX) is a leading used vehicle retailer in the United States. The company has a strong financial position with a market capitalization of $11.41 billion and an EBITDA of $926.96 million. CarMax's key financial ratios indicate profitability and efficiency, with a PE ratio of 27.7, a PEG ratio of 1.128, and a profit margin of 1.51%. The company's revenue growth has been flat in the past year, but its earnings growth has been positive.
Company Overview
CarMax was founded in 1993 and is headquartered in Richmond, Virginia. The company operates two business segments: CarMax Sales Operations and CarMax Auto Finance. CarMax Sales Operations sells used vehicles through its nationwide network of stores and online platform. CarMax Auto Finance provides financing to customers who purchase vehicles from CarMax.
Fundamental Analysis
CarMax's financial performance has been solid in recent years. The company's revenue has grown at a compound annual growth rate (CAGR) of 4.5% over the past five years. Net income has grown at a CAGR of 6.2% over the same period. CarMax's profitability metrics are also strong, with a gross margin of 10.1% and a net margin of 1.5%.
CarMax's balance sheet is also strong. The company has a low level of debt and a high level of cash and equivalents. This gives CarMax the financial flexibility to invest in its business and pursue growth opportunities.
Technical Analysis
CarMax's stock price has been trending higher in recent months. The stock is currently trading above its 50-day and 200-day moving averages. The relative strength index (RSI) is also above 50, which indicates that the stock is in a bullish trend.
Short Term Outlook
In the short term, CarMax's stock price is likely to continue to trend higher. The company's strong financial performance and positive technical indicators suggest that the stock is undervalued.
Long Term Outlook
In the long term, CarMax is well-positioned for growth. The company has a strong brand, a loyal customer base, and a nationwide network of stores. CarMax is also benefiting from the growing trend of consumers buying used vehicles.
Analyst Recommendations
Analysts are generally positive on CarMax's stock. The consensus analyst rating is "buy." The average analyst target price is $80.3, which represents a potential upside of 7.4% from the current price.
