Carmax Stock Fair Value – Analysts Give Thumbs Up to Carmax Stock, Recommending Hold for Investors
March 28, 2024
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Carmax ($NYSE:KMX) Inc. is a well-known company in the automotive retail industry, operating a chain of used car dealerships across the United States. The company has gained recognition for its unique business model, which allows customers to purchase vehicles without the need to negotiate prices with salespeople. As such, the company has attracted significant attention from investors, with its stock price experiencing steady growth over the years. Recently, analysts have given their stamp of approval to Carmax Inc. stock, recommending a “hold” for investors. This rating comes as no surprise, as Wall Street has consistently shown optimism towards the company. In fact, the stock currently holds an average “buy” rating from analysts, further emphasizing their confidence in its potential. First and foremost, a “hold” recommendation means that analysts believe the stock is fairly valued at its current price and that there is no immediate need to buy or sell shares. This suggests that Carmax Inc. may not experience significant price movements in the near future, giving investors a sense of stability. Moreover, it is important to note that a “hold” recommendation does not necessarily mean a negative outlook for the company. In fact, analysts may still see potential for growth in Carmax Inc. and may revise their recommendations to “buy” in the future. It also reflects their confidence in the company’s ability to maintain its current performance.
However, as with any investment decision, it is important to conduct thorough research and consider personal financial goals before making any decisions.
Additionally, it is always wise to consult with a financial advisor for personalized advice on stock investments. With analysts backing Carmax Inc. and its innovative business model, the future looks bright for this well-established company in the automotive industry.
Market Price
The day saw CARMAX stock open at $86.0 and close at $87.0, showing a 1.4% increase from the previous closing price of 85.8. This rise in stock value is indicative of the overall confidence analysts have in CARMAX’s financial performance and potential for growth. While the stock has been fluctuating over the past few months, this recent increase is a good sign for investors. Analysts are also citing the strong performance of the automotive industry as a whole as a contributing factor to their positive outlook on CARMAX. As one of the largest used car retailers in the US, CARMAX has a strong position in the market and stands to benefit from the current demand for vehicles.
Furthermore, CARMAX’s business model, which focuses on providing a hassle-free and transparent buying experience for customers, has proven to be successful. This has helped the company build a loyal customer base and maintain a steady stream of revenue. This indicates their belief that the stock will continue to perform well in the near future. With a strong position in the automotive market and a successful business model, CARMAX has shown promise for continued growth and success. Carmax_Stock_Recommending_Hold_for_Investors”>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 |
| 26.63k | 497.95 | 1.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Carmax. More…
| Operations | Investing | Financing |
| -229.77 | -464.33 | 634.14 |
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 |
| 27.17k | 21.13k | 38.09 |
Key Ratios Snapshot
Some of the financial key ratios for Carmax are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 12.4% | -9.7% | 5.1% |
| FCF Margin | ROE | ROA |
| -2.6% | 14.1% | 3.1% |
Analysis – Carmax Stock Fair Value
As an analyst at GoodWhale, I have conducted a thorough analysis of CARMAX’s financials. This includes examining their balance sheet, income statement, and cash flow statement to gain a comprehensive understanding of the company’s financial health. Based on our proprietary Valuation Line, we have determined that the intrinsic value of CARMAX’s stock is around $89.2. This calculation takes into consideration various factors such as the company’s revenue, earnings, and growth potential. Our analysis suggests that the current market price of CARMAX’s stock, which is trading at $87.0, is undervalued by 2.4%. This implies that now may be a good time to consider investing in CARMAX. With the stock being undervalued, there is potential for it to increase in value over time. Additionally, CARMAX has a strong financial standing, with a solid balance sheet and consistent earnings growth. This makes it a stable and attractive investment option. However, it is important to note that there are always risks associated with investing in any company. As with any stock, it is crucial for investors to conduct their own research and carefully consider their investment strategy before making any decisions. In conclusion, our analysis suggests that CARMAX’s stock is currently undervalued and presents a good opportunity for investors. With its sound financials and potential for growth, it could be a valuable addition to an investment portfolio. Carmax_Stock_Recommending_Hold_for_Investors”>More…
Peers
CarMax Inc is one of the largest used car dealers in the United States. Its competitors include Lithia Motors Inc, Sonic Automotive Inc, and Eagers Automotive Ltd. CarMax offers a wide variety of services, including financing, insurance, and extended warranties. It has a nationwide network of stores and a strong online presence.
– Lithia Motors Inc ($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
Wall Street analysts have a positive outlook on the stock of Carmax Inc. On average, they give the company a Buy rating, suggesting that they believe it is a good investment opportunity. This indicates that analysts believe the stock has the potential for growth and may provide returns for investors. Investors should consider this positive sentiment from analysts when making decisions about whether to hold or sell their shares in Carmax Inc. However, it is important for investors to conduct their own research and consider other factors such as market trends and financial performance before making any investment decisions.
