Carmax Intrinsic Value – CARMAX Reports 5.5% Decrease in Revenue for Third Quarter of FY2024

🌥️Earnings Overview

On December 21, 2023, CARMAX ($NYSE:KMX) released their financial results for the third quarter of FY2024, with total revenue of USD 6148.5 million, representing a decrease of 5.5% compared to the same quarter of the prior year. Net income reported rose 118.2% year-over-year to USD 82.0 million.

Analysis – Carmax Intrinsic Value

GoodWhale has conducted an analysis of CARMAX‘s financials and determined that its fair value is around $112.6, as calculated by our proprietary Valuation Line. This means that the current price of CARMAX stock, which is currently trading at $78.6, is undervalued by 30.2%. This presents investors with a great opportunity to purchase stocks of CARMAX at a much lower price than its fair value. Investors should take this opportunity to invest in CARMAX and reap the rewards in the future when their stock price rises to its fair value. More…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Carmax. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Carmax. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Carmax. More…

Key Ratios Snapshot

Some of the financial key ratios for Carmax are shown below. More…

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

CARMAX‘s third quarter FY2024 earnings results indicate a drop in revenue of 5.5% compared to the same quarter in the previous year.

However, net income saw an impressive growth of 118.2% year-on-year. On the day of the announcement, CARMAX’s stock price rose accordingly. This upbeat result is a good sign for those considering investing in CARMAX, as it illustrates the company’s improving financial strength and prospects. Investors should continue to monitor CARMAX’s financial performance in the coming quarters to determine if now is the right time to invest.