- CarMax reported strong third-quarter net sales and operating revenue of $6.22 billion, a 1.2% increase from the previous year, surpassing the estimated $6.04 billion.
- Used vehicle sales reached $4.89 billion, rising by 1.2% year-over-year, and exceeded the projected $4.8 billion.
- Wholesale vehicle sales amounted to $1.17 billion, marking a 0.3% year-over-year increase, outperforming the estimated $1.05 billion.
- Other sales totaled $165.9 million, slightly above the estimate of $164.1 million.
- Extended protection plan revenues saw a significant 16% increase, reaching $105.5 million and outperforming the estimate of $102.1 million.
- Third-party finance income showed marked improvement with $1.0 million income compared to a $1.2 million loss the previous year, against an estimated loss of $1.2 million.
- Earnings per share (EPS) rose to 81 cents, up from 52 cents year-over-year.
- Used vehicle gross profit increased by 6.8% year-over-year to $424.8 million, surpassing the estimated $412.6 million.
- Wholesale vehicle gross profit grew by 12% year-over-year to $138.1 million, beating the estimate of $126.1 million.
- According to CEO Bill Nash, solid execution and a stable vehicle valuation environment contributed to robust EPS growth through increased unit sales and buys, solid margins, and effective management of SG&A costs.
- CarMax received 11 buy ratings, 6 hold ratings, and 3 sell ratings from analysts.
Carmax Inc on Smartkarma
Analysts at Baptista Research have been closely monitoring CarMax Inc. on Smartkarma, an independent investment research network. Their recent report titled “CarMax Inc.: Enhanced Digital & Omni-channel Capabilities & Other Major Drivers” delves into the company’s second-quarter earnings for the fiscal year 2025. Despite a slight 1% decline year-over-year in total sales of $7 billion, primarily due to retail and wholesale price drops, CarMax showed resilience with increased retail volume and managed to navigate challenges in the auto loan market.
In another report by Baptista Research on Smartkarma, titled “CarMax Inc.: Operational Efficiencies In Reconditioning & Logistics Expanding The Bottom-Line? – Major Drivers,” the analysts analyze CarMax’s fiscal 2025 first-quarter results. They highlight both positive and negative aspects of the financial scenario. Noteworthy points include a stabilization in vehicle values and a decline in average vehicle selling prices, indicating potential opportunities for the company to enhance operational efficiencies and drive bottom-line growth.
A look at Carmax Inc Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 1 | |
| Growth | 2 | |
| Resilience | 2 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 2.4 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
CarMax Inc, a company that sells used cars and light trucks, has received a mixed outlook based on the Smartkarma Smart Scores analysis. While the company demonstrates strong momentum with a score of 4, indicating positive upward trends, it falls short in other areas. With a value score of 3, CarMax is considered moderately valued, not presenting an exceptional opportunity for value investors. Additionally, the company’s dividend score of 1 reflects a low dividend payout. Its growth and resilience scores sit at 2, suggesting average growth prospects and resilience to market challenges.
In summary, CarMax Inc’s Smart Scores paint a picture of a company with promising momentum but lacking in terms of dividend, growth, and resilience factors. Investors may find potential in the company’s positive momentum, while taking into consideration its moderate value, limited dividend opportunities, and average growth prospects. As a retailer of used vehicles operating across the United States, CarMax Inc continues to navigate these dynamics in the automotive market.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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