CARMAX INC (KMX) Stock Fundamental Analysis
NYSE:KMX - New York Stock Exchange, Inc. - US1431301027 - Common Stock - Currency: USD
KMX gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 122 industry peers in the Specialty Retail industry. KMX has an average financial health and profitability rating. KMX is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
KMX had positive earnings in the past year.
In the past year KMX had a positive cash flow from operations.
In the past 5 years KMX has always been profitable.
KMX had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
KMX has a Return On Assets (2.04%) which is in line with its industry peers.
KMX has a better Return On Equity (8.88%) than 65.57% of its industry peers.
KMX has a Return On Invested Capital (0.85%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for KMX is significantly below the industry average of 12.95%.
The last Return On Invested Capital (0.85%) for KMX is above the 3 year average (0.57%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.04% | ||
| ROE | 8.88% | ||
| ROIC | 0.85% |
ROA(3y)1.81%
ROA(5y)2.66%
ROE(3y)8.18%
ROE(5y)12.73%
ROIC(3y)0.57%
ROIC(5y)1.15%
1.3 Margins
The Profit Margin of KMX (2.08%) is comparable to the rest of the industry.
KMX's Profit Margin has declined in the last couple of years.
KMX has a Operating Margin of 1.07%. This is comparable to the rest of the industry: KMX outperforms 45.08% of its industry peers.
In the last couple of years the Operating Margin of KMX has declined.
Looking at the Gross Margin, with a value of 11.20%, KMX is doing worse than 93.44% of the companies in the same industry.
In the last couple of years the Gross Margin of KMX has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.07% | ||
| PM (TTM) | 2.08% | ||
| GM | 11.2% |
OM growth 3Y-30.89%
OM growth 5Y-27.28%
PM growth 3Y-19.26%
PM growth 5Y-15.36%
GM growth 3Y2.19%
GM growth 5Y-3.87%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), KMX is destroying value.
The number of shares outstanding for KMX has been reduced compared to 1 year ago.
The number of shares outstanding for KMX has been reduced compared to 5 years ago.
Compared to 1 year ago, KMX has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.65, we must say that KMX is in the distress zone and has some risk of bankruptcy.
KMX's Altman-Z score of 1.65 is on the low side compared to the rest of the industry. KMX is outperformed by 62.30% of its industry peers.
The Debt to FCF ratio of KMX is 35.05, which is on the high side as it means it would take KMX, 35.05 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 35.05, KMX perfoms like the industry average, outperforming 47.54% of the companies in the same industry.
A Debt/Equity ratio of 2.89 is on the high side and indicates that KMX has dependencies on debt financing.
KMX has a worse Debt to Equity ratio (2.89) than 74.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.89 | ||
| Debt/FCF | 35.05 | ||
| Altman-Z | 1.65 |
ROIC/WACC0.15
WACC5.73%
2.3 Liquidity
A Current Ratio of 2.39 indicates that KMX has no problem at all paying its short term obligations.
The Current ratio of KMX (2.39) is better than 87.70% of its industry peers.
KMX has a Quick Ratio of 2.39. This is a bad value and indicates that KMX is not financially healthy enough and could expect problems in meeting its short term obligations.
With a decent Quick ratio value of 0.80, KMX is doing good in the industry, outperforming 68.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.39 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
KMX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 43.75%, which is quite impressive.
KMX shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -9.31% yearly.
Looking at the last year, KMX shows a small growth in Revenue. The Revenue has grown by 3.17% in the last year.
KMX shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.34% yearly.
EPS 1Y (TTM)43.75%
EPS 3Y-22.26%
EPS 5Y-9.31%
EPS Q2Q%42.27%
Revenue 1Y (TTM)3.17%
Revenue growth 3Y-6.17%
Revenue growth 5Y5.34%
Sales Q2Q%6.09%
3.2 Future
Based on estimates for the next years, KMX will show a very strong growth in Earnings Per Share. The EPS will grow by 27.57% on average per year.
KMX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.67% yearly.
EPS Next Y20.6%
EPS Next 2Y17.47%
EPS Next 3Y20.87%
EPS Next 5Y27.57%
Revenue Next Year3.44%
Revenue Next 2Y4.1%
Revenue Next 3Y4.59%
Revenue Next 5Y3.67%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 17.72, KMX is valued on the expensive side.
74.59% of the companies in the same industry are more expensive than KMX, based on the Price/Earnings ratio.
KMX is valuated rather cheaply when we compare the Price/Earnings ratio to 27.51, which is the current average of the S&P500 Index.
KMX is valuated correctly with a Price/Forward Earnings ratio of 14.45.
Based on the Price/Forward Earnings ratio, KMX is valued a bit cheaper than the industry average as 68.03% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 35.58. KMX is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.72 | ||
| Fwd PE | 14.45 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KMX indicates a slightly more expensive valuation: KMX is more expensive than 66.39% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, KMX is valued a bit cheaper than 76.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.09 | ||
| EV/EBITDA | 48.21 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as KMX's earnings are expected to grow with 20.87% in the coming years.
PEG (NY)0.86
PEG (5Y)N/A
EPS Next 2Y17.47%
EPS Next 3Y20.87%
5. Dividend
5.1 Amount
KMX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
65.2
+0.86 (+1.34%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners108.88%
Inst Owner Change0%
Ins Owners0.37%
Ins Owner Change5.69%
Market Cap9.78B
Analysts78.18
Price Target84.45 (29.52%)
Short Float %9.61%
Short Ratio4.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)7.35%
Min EPS beat(2)-2.08%
Max EPS beat(2)16.78%
EPS beat(4)2
Avg EPS beat(4)11.18%
Min EPS beat(4)-2.08%
Max EPS beat(4)31.69%
EPS beat(8)4
Avg EPS beat(8)3.16%
EPS beat(12)6
Avg EPS beat(12)3.69%
EPS beat(16)8
Avg EPS beat(16)1.7%
Revenue beat(2)1
Avg Revenue beat(2)-0.03%
Min Revenue beat(2)-0.57%
Max Revenue beat(2)0.5%
Revenue beat(4)3
Avg Revenue beat(4)1.06%
Min Revenue beat(4)-0.57%
Max Revenue beat(4)2.33%
Revenue beat(8)3
Avg Revenue beat(8)-0.69%
Revenue beat(12)4
Avg Revenue beat(12)-2.32%
Revenue beat(16)8
Avg Revenue beat(16)0.17%
PT rev (1m)-0.34%
PT rev (3m)-8.03%
EPS NQ rev (1m)-3.81%
EPS NQ rev (3m)-4.63%
EPS NY rev (1m)4.85%
EPS NY rev (3m)0.85%
Revenue NQ rev (1m)-2.34%
Revenue NQ rev (3m)-2.28%
Revenue NY rev (1m)-1.15%
Revenue NY rev (3m)-0.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.72 | ||
| Fwd PE | 14.45 | ||
| P/S | 0.37 | ||
| P/FCF | 18.09 | ||
| P/OCF | 9.39 | ||
| P/B | 1.56 | ||
| P/tB | 1.59 | ||
| EV/EBITDA | 48.21 |
EPS(TTM)3.68
EY5.64%
EPS(NY)4.51
Fwd EY6.92%
FCF(TTM)3.6
FCFY5.53%
OCF(TTM)6.94
OCFY10.65%
SpS178.49
BVpS41.89
TBVpS40.95
PEG (NY)0.86
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.04% | ||
| ROE | 8.88% | ||
| ROCE | 1.14% | ||
| ROIC | 0.85% | ||
| ROICexc | 0.86% | ||
| ROICexgc | 0.86% | ||
| OM | 1.07% | ||
| PM (TTM) | 2.08% | ||
| GM | 11.2% | ||
| FCFM | 2.02% |
ROA(3y)1.81%
ROA(5y)2.66%
ROE(3y)8.18%
ROE(5y)12.73%
ROIC(3y)0.57%
ROIC(5y)1.15%
ROICexc(3y)0.58%
ROICexc(5y)1.16%
ROICexgc(3y)0.58%
ROICexgc(5y)1.16%
ROCE(3y)0.76%
ROCE(5y)1.54%
ROICexcg growth 3Y-35.83%
ROICexcg growth 5Y-27.01%
ROICexc growth 3Y-35.83%
ROICexc growth 5Y-27.09%
OM growth 3Y-30.89%
OM growth 5Y-27.28%
PM growth 3Y-19.26%
PM growth 5Y-15.36%
GM growth 3Y2.19%
GM growth 5Y-3.87%
F-Score8
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.89 | ||
| Debt/FCF | 35.05 | ||
| Debt/EBITDA | 30.8 | ||
| Cap/Depr | 164% | ||
| Cap/Sales | 1.87% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 176.34% | ||
| Profit Quality | 96.85% | ||
| Current Ratio | 2.39 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 1.65 |
F-Score8
WACC5.73%
ROIC/WACC0.15
Cap/Depr(3y)165.6%
Cap/Depr(5y)135.54%
Cap/Sales(3y)1.65%
Cap/Sales(5y)1.36%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)43.75%
EPS 3Y-22.26%
EPS 5Y-9.31%
EPS Q2Q%42.27%
EPS Next Y20.6%
EPS Next 2Y17.47%
EPS Next 3Y20.87%
EPS Next 5Y27.57%
Revenue 1Y (TTM)3.17%
Revenue growth 3Y-6.17%
Revenue growth 5Y5.34%
Sales Q2Q%6.09%
Revenue Next Year3.44%
Revenue Next 2Y4.1%
Revenue Next 3Y4.59%
Revenue Next 5Y3.67%
EBIT growth 1Y82.98%
EBIT growth 3Y-35.16%
EBIT growth 5Y-23.4%
EBIT Next Year47.76%
EBIT Next 3Y23.46%
EBIT Next 5Y24.6%
FCF growth 1Y427.85%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y83.69%
OCF growth 3YN/A
OCF growth 5YN/A