CARMAX INC (KMX)
US1431301027 - Common Stock
KMX gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 121 industry peers in the Specialty Retail industry. KMX scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. KMX is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
KMX had positive earnings in the past year.
KMX had a positive operating cash flow in the past year.
In the past 5 years KMX has always been profitable.
The reported operating cash flow has been mixed in the past 5 years: KMX reported negative operating cash flow in multiple years.
1.2 Ratios
KMX's Return On Assets of 1.69% is in line compared to the rest of the industry. KMX outperforms 56.67% of its industry peers.
Looking at the Return On Equity, with a value of 7.42%, KMX is in the better half of the industry, outperforming 64.17% of the companies in the same industry.
KMX has a worse Return On Invested Capital (0.48%) than 61.67% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for KMX is significantly below the industry average of 12.29%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.69% | ||
| ROE | 7.42% | ||
| ROIC | 0.48% |
ROA(3y)2.66%
ROA(5y)3.13%
ROE(3y)12.84%
ROE(5y)15.84%
ROIC(3y)1.15%
ROIC(5y)1.64%
1.3 Margins
KMX has a Profit Margin (1.77%) which is in line with its industry peers.
KMX's Profit Margin has declined in the last couple of years.
KMX's Operating Margin of 0.62% is in line compared to the rest of the industry. KMX outperforms 40.83% 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 10.84%, KMX is doing worse than 93.33% 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 | 0.62% | ||
| PM (TTM) | 1.77% | ||
| GM | 10.84% |
OM growth 3Y-24.96%
OM growth 5Y-24.69%
PM growth 3Y-22.91%
PM growth 5Y-17.18%
GM growth 3Y-6.61%
GM growth 5Y-5.61%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so KMX is destroying value.
KMX has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, KMX has less shares outstanding
The debt/assets ratio for KMX has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.68, we must say that KMX is in the distress zone and has some risk of bankruptcy.
KMX has a worse Altman-Z score (1.68) than 63.33% of its industry peers.
The Debt to FCF ratio of KMX is 55.33, which is on the high side as it means it would take KMX, 55.33 years of fcf income to pay off all of its debts.
KMX's Debt to FCF ratio of 55.33 is in line compared to the rest of the industry. KMX outperforms 43.33% of its industry peers.
A Debt/Equity ratio of 2.92 is on the high side and indicates that KMX has dependencies on debt financing.
KMX's Debt to Equity ratio of 2.92 is on the low side compared to the rest of the industry. KMX is outperformed by 74.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.92 | ||
| Debt/FCF | 55.33 | ||
| Altman-Z | 1.68 |
ROIC/WACC0.07
WACC6.91%
2.3 Liquidity
A Current Ratio of 2.30 indicates that KMX has no problem at all paying its short term obligations.
The Current ratio of KMX (2.30) is better than 84.17% of its industry peers.
KMX has a Quick Ratio of 2.30. This is a bad value and indicates that KMX is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.55, KMX is in line with its industry, outperforming 55.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.3 | ||
| Quick Ratio | 0.55 |
3. Growth
3.1 Past
KMX shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.79%.
Measured over the past years, KMX shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -10.50% on average per year.
KMX shows a decrease in Revenue. In the last year, the revenue decreased by -2.46%.
Measured over the past years, KMX shows a small growth in Revenue. The Revenue has been growing by 7.87% on average per year.
EPS 1Y (TTM)2.79%
EPS 3Y-14.04%
EPS 5Y-10.5%
EPS Q2Q%55.77%
Revenue 1Y (TTM)-2.46%
Revenue growth 3Y11.88%
Revenue growth 5Y7.87%
Sales Q2Q%1.22%
3.2 Future
The Earnings Per Share is expected to grow by 31.26% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 3.28% on average over the next years.
EPS Next Y10.26%
EPS Next 2Y17.87%
EPS Next 3Y21.66%
EPS Next 5Y31.26%
Revenue Next Year-2.56%
Revenue Next 2Y0.43%
Revenue Next 3Y2.08%
Revenue Next 5Y3.28%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 28.57, KMX can be considered very expensive at the moment.
KMX's Price/Earnings is on the same level as the industry average.
KMX's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.20.
A Price/Forward Earnings ratio of 22.06 indicates a rather expensive valuation of KMX.
The rest of the industry has a similar Price/Forward Earnings ratio as KMX.
The average S&P500 Price/Forward Earnings ratio is at 23.73. KMX is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.57 | ||
| Fwd PE | 22.06 |
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 68.33% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as KMX.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.68 | ||
| EV/EBITDA | 70.5 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
A more expensive valuation may be justified as KMX's earnings are expected to grow with 21.66% in the coming years.
PEG (NY)2.78
PEG (5Y)N/A
EPS Next 2Y17.87%
EPS Next 3Y21.66%
5. Dividend
5.1 Amount
KMX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
CARMAX INC
NYSE:KMX (12/20/2024, 8:21:21 PM)
After market: 84.5 +0.23 (+0.27%)84.27
+0.04 (+0.05%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners111.98%
Inst Owner Change-1.12%
Ins Owners0.35%
Ins Owner Change2.13%
Market Cap13.06B
Analysts74.29
Price Target86.85 (3.06%)
Short Float %9.75%
Short Ratio8.56
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/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)16.69%
Min EPS beat(2)-1.65%
Max EPS beat(2)35.03%
EPS beat(4)2
Avg EPS beat(4)-0.33%
Min EPS beat(4)-35.13%
Max EPS beat(4)35.03%
EPS beat(8)5
Avg EPS beat(8)17.82%
EPS beat(12)6
Avg EPS beat(12)1.17%
EPS beat(16)9
Avg EPS beat(16)4.7%
Revenue beat(2)2
Avg Revenue beat(2)2.34%
Min Revenue beat(2)2.33%
Max Revenue beat(2)2.36%
Revenue beat(4)2
Avg Revenue beat(4)-0.36%
Min Revenue beat(4)-3.87%
Max Revenue beat(4)2.36%
Revenue beat(8)3
Avg Revenue beat(8)-1.28%
Revenue beat(12)5
Avg Revenue beat(12)-2.02%
Revenue beat(16)8
Avg Revenue beat(16)1.5%
PT rev (1m)-0.29%
PT rev (3m)3.81%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.48%
EPS NY rev (1m)0.51%
EPS NY rev (3m)0.67%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.16%
Revenue NY rev (1m)0.42%
Revenue NY rev (3m)1.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.57 | ||
| Fwd PE | 22.06 | ||
| P/S | 0.5 | ||
| P/FCF | 38.68 | ||
| P/OCF | 16.57 | ||
| P/B | 2.1 | ||
| P/tB | 2.15 | ||
| EV/EBITDA | 70.5 |
EPS(TTM)2.95
EY3.5%
EPS(NY)3.82
Fwd EY4.53%
FCF(TTM)2.18
FCFY2.59%
OCF(TTM)5.08
OCFY6.03%
SpS167.68
BVpS40.09
TBVpS39.18
PEG (NY)2.78
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.69% | ||
| ROE | 7.42% | ||
| ROCE | 0.64% | ||
| ROIC | 0.48% | ||
| ROICexc | 0.49% | ||
| ROICexgc | 0.49% | ||
| OM | 0.62% | ||
| PM (TTM) | 1.77% | ||
| GM | 10.84% | ||
| FCFM | 1.3% |
ROA(3y)2.66%
ROA(5y)3.13%
ROE(3y)12.84%
ROE(5y)15.84%
ROIC(3y)1.15%
ROIC(5y)1.64%
ROICexc(3y)1.17%
ROICexc(5y)1.65%
ROICexgc(3y)1.17%
ROICexgc(5y)1.66%
ROCE(3y)1.53%
ROCE(5y)2.18%
ROICexcg growth 3Y-21.56%
ROICexcg growth 5Y-23.97%
ROICexc growth 3Y-21.72%
ROICexc growth 5Y-24.06%
OM growth 3Y-24.96%
OM growth 5Y-24.69%
PM growth 3Y-22.91%
PM growth 5Y-17.18%
GM growth 3Y-6.61%
GM growth 5Y-5.61%
F-Score6
Asset Turnover0.95
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.92 | ||
| Debt/FCF | 55.33 | ||
| Debt/EBITDA | 40.67 | ||
| Cap/Depr | 158.4% | ||
| Cap/Sales | 1.73% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 176.53% | ||
| Profit Quality | 73.22% | ||
| Current Ratio | 2.3 | ||
| Quick Ratio | 0.55 | ||
| Altman-Z | 1.68 |
F-Score6
WACC6.91%
ROIC/WACC0.07
Cap/Depr(3y)150.33%
Cap/Depr(5y)134.55%
Cap/Sales(3y)1.38%
Cap/Sales(5y)1.33%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)2.79%
EPS 3Y-14.04%
EPS 5Y-10.5%
EPS Q2Q%55.77%
EPS Next Y10.26%
EPS Next 2Y17.87%
EPS Next 3Y21.66%
EPS Next 5Y31.26%
Revenue 1Y (TTM)-2.46%
Revenue growth 3Y11.88%
Revenue growth 5Y7.87%
Sales Q2Q%1.22%
Revenue Next Year-2.56%
Revenue Next 2Y0.43%
Revenue Next 3Y2.08%
Revenue Next 5Y3.28%
EBIT growth 1Y-46.55%
EBIT growth 3Y-16.05%
EBIT growth 5Y-18.77%
EBIT Next Year39.99%
EBIT Next 3Y22.92%
EBIT Next 5Y26.26%
FCF growth 1Y-57.5%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-34.1%
OCF growth 3Y-11.77%
OCF growth 5Y22.99%