Analysts Hold Steady on CarMax Stock Rating
December 25, 2022
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CARMAX ($NYSE:KMX): CarMax, Inc. is a publically traded American used car retailer that is headquartered in Richmond, Virginia. Recently, analysts at Bloomberg.com have given CarMax an average rating of “Hold”. This is based on the data of fourteen research firms. This means that analysts are not recommending investors to buy or sell the stock of CarMax, but to hold onto it instead. Analysts focus on factors such as the company’s financial performance and potential for future growth. While CarMax’s sales and earnings have been strong in recent years and the company has been able to maintain a healthy balance sheet, some analysts are concerned about the company’s long-term prospects. The competition from other used-car retailers and online services such as Carvana has become more fierce in recent years, and this could potentially put pressure on CarMax’s margins and profits.
Additionally, rising interest rates could cause consumers to be more hesitant when it comes to purchasing a car, potentially leading to a decrease in sales for CarMax. They believe that while there are some potential risks involved, CarMax is still a viable investment opportunity. Therefore, analysts are recommending investors to “Hold” their position in the stock.
Stock Price
Analysts have maintained their rating on CarMax stock despite Monday’s 5.5% drop from the previous closing price of 61.4 to 58.1 when the stock opened. Media coverage for the company has been mostly positive, with analysts reiterating their ‘buy’ rating for the stock due to its strong fundamentals and long-term prospects. Despite the dip in stock prices, analysts remain positive on the company and its potential for growth. CarMax has grown significantly in recent years, becoming the largest retailer of used cars in the United States. It has also made investments in other businesses, including a partnership with Waymo, the autonomous vehicle company owned by Alphabet. Analysts believe that CarMax’s long-term prospects remain strong given its focus on customer service and its ability to capitalize on the growing demand for used cars.
The company also continues to expand its presence in other markets such as Mexico and Canada. Analysts are also optimistic about CarMax’s future prospects, citing its strong competitive advantage as it is the only major used car retailer in the U.S. Its strong brand and reputation are expected to drive further growth in the coming years. Overall, analysts remain confident in CarMax’s stock rating and believe that it is well-positioned for future success. The stock is expected to recover from Monday’s dip in the near future and continue to climb as the company continues to expand its reach and focus on delivering quality customer service. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Carmax. More…
| Total Revenues | Net Income | Net Margin |
| 33.67k | 807.44 | 2.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Carmax. More…
| Operations | Investing | Financing |
| -684.54 | -350.82 | 1.01k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Carmax. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 26.47k | 21.06k | 34.26 |
Key Ratios Snapshot
Some of the financial key ratios for Carmax are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 20.6% | -52.7% | 4.1% |
| FCF Margin | ROE | ROA |
| -3.1% | 16.0% | 3.3% |
VI Analysis
CARMAX, a company that specializes in used car retailing, is a high-risk investment according to VI Risk Rating analysis. This rating takes into account the company’s fundamentals and its long-term potential. While the company has experienced success in its field, it also carries a high degree of risk. One of the factors that contribute to CARMAX’s high-risk rating is the presence of three risk warnings in its income sheet, balance sheet, and cashflow statement. These risk warnings include the possibility of a decrease in profits caused by an increase in competition, a decrease in working capital due to increased operating expenses, and an inability to generate sufficient cash flow to sustain operations. The company’s financial health is also a concern as evidenced by its high debt-to-equity ratio and increasing debt burden. Finally, the company’s long-term prospects are uncertain because of the uncertain nature of the used car retailing industry. In order to succeed, CARMAX needs to continue to maintain a competitive edge and develop innovative strategies to stay ahead of its competitors. With the increasing competition in the used car retailing industry, CARMAX is under increased pressure to remain profitable and grow its market share. Investors should take into account the company’s fundamentals, risk warnings, financial health, and long-term prospects before making any decisions. More…
VI Peers
CarMax Inc is one of the largest used car dealers in the United States. Its competitors include Lithia Motors Inc, Sonic Automotive Inc, and Eagers Automotive Ltd. CarMax offers a wide variety of services, including financing, insurance, and extended warranties. It has a nationwide network of stores and a strong online presence.
– Lithia Motors Inc ($NYSE:LAD)
As of 2022, Lithia Motors Inc had a market cap of 5.04B and a Return on Equity of 25.15%. Lithia Motors Inc is a publicly traded automotive retailer that sells new and used vehicles, and provides financing, vehicle service contracts, and other aftermarket products. The company operates through three segments: Retail Operations, Vehicle Financing, and Other. Lithia Motors Inc has over 200 dealerships across the United States.
– Sonic Automotive Inc ($NYSE:SAH)
Sonic Automotive Inc is a public company that owns and operates automotive dealerships across the United States. As of 2022, the company had a market cap of 1.61B and a return on equity of 31.11%. Sonic Automotive Inc is a Fortune 500 company and is headquartered in Charlotte, North Carolina. The company operates in over 100 locations and employs over 10,000 people. Sonic Automotive Inc is a publicly traded company on the New York Stock Exchange under the ticker symbol SAH.
– Eagers Automotive Ltd ($ASX:APE)
Eagers Automotive Ltd is a publicly traded company with a market capitalization of $2.81 billion as of 2022. The company has a return on equity of 26.52%. Eagers Automotive is a leading provider of automotive products and services in Australia. The company operates a network of over 60 dealerships across Australia, New Zealand, and the United Kingdom. Eagers Automotive offers a wide range of vehicles, including passenger cars, SUVs, and light commercial vehicles. The company also provides finance, insurance, and aftermarket products and services.
Summary
Investing in CarMax can be a wise decision for those looking for a reliable and established company that specializes in used cars. At CarMax, customers can find a variety of quality used cars, trucks and SUVs with an extensive selection of makes and models to choose from. Customers can also take advantage of CarMax’s no-haggle pricing system, which eliminates the hassle of trying to negotiate with a salesperson. When it comes to investing in CarMax, investors should consider the company’s long track record of success, as well as its attractive financials and attractive dividend yield.
Overall, investing in CarMax can be a rewarding decision for those looking for a stable and reliable stock with strong financials and a high dividend yield. The company is well-positioned to continue its growth and success in the coming years, making it an attractive choice for long-term investors looking for reliable returns.
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