CARMAX INC (KMX)
US1431301027 - Common Stock
We assign a fundamental rating of 3 out of 10 to KMX. KMX was compared to 123 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 valied quite expensively at the moment, while it does show 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.
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 1.53% is in line compared to the rest of the industry. KMX outperforms 55.37% of its industry peers.
The Return On Equity of KMX (6.76%) is better than 62.81% of its industry peers.
KMX has a Return On Invested Capital of 0.37%. This is in the lower half of the industry: KMX underperforms 61.98% of its industry peers.
KMX had an Average Return On Invested Capital over the past 3 years of 1.15%. This is significantly below the industry average of 12.26%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.53% | ||
| ROE | 6.76% | ||
| ROIC | 0.37% |
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
Looking at the Profit Margin, with a value of 1.61%, KMX is in line with its industry, outperforming 57.02% of the companies in the same industry.
KMX's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 0.48%, KMX is not doing good in the industry: 60.33% of the companies in the same industry are doing better.
In the last couple of years the Operating Margin of KMX has declined.
KMX's Gross Margin of 10.62% is on the low side compared to the rest of the industry. KMX is outperformed by 93.39% of its industry peers.
KMX's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 0.48% | ||
| PM (TTM) | 1.61% | ||
| GM | 10.62% |
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
KMX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for KMX has been reduced compared to 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 1.65, we must say that KMX is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.65, KMX is not doing good in the industry: 65.29% of the companies in the same industry are doing better.
KMX has a debt to FCF ratio of 34.21. This is a negative value and a sign of low solvency as KMX would need 34.21 years to pay back of all of its debts.
KMX's Debt to FCF ratio of 34.21 is in line compared to the rest of the industry. KMX outperforms 45.45% of its industry peers.
KMX has a Debt/Equity ratio of 2.96. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of KMX (2.96) is worse than 75.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.96 | ||
| Debt/FCF | 34.21 | ||
| Altman-Z | 1.65 |
ROIC/WACC0.06
WACC6.44%
2.3 Liquidity
A Current Ratio of 2.25 indicates that KMX has no problem at all paying its short term obligations.
KMX has a Current ratio of 2.25. This is amongst the best in the industry. KMX outperforms 83.47% of its industry peers.
KMX has a Quick Ratio of 2.25. This is a bad value and indicates that KMX is not financially healthy enough and could expect problems in meeting its short term obligations.
KMX has a Quick ratio (0.68) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.25 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.70% over the past year.
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.
The Revenue has decreased by -4.03% in the past year.
The Revenue has been growing slightly by 7.87% on average over the past years.
EPS 1Y (TTM)2.7%
EPS 3Y-14.04%
EPS 5Y-10.5%
EPS Q2Q%13.33%
Revenue 1Y (TTM)-4.03%
Revenue growth 3Y11.88%
Revenue growth 5Y7.87%
Sales Q2Q%-0.85%
3.2 Future
KMX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 32.29% yearly.
KMX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.21% yearly.
EPS Next Y9.7%
EPS Next 2Y17.74%
EPS Next 3Y23.17%
EPS Next 5Y32.29%
Revenue Next Year-2.96%
Revenue Next 2Y0.39%
Revenue Next 3Y2.17%
Revenue Next 5Y4.21%
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
Based on the Price/Earnings ratio of 30.31, the valuation of KMX can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as KMX.
Compared to an average S&P500 Price/Earnings ratio of 28.96, KMX is valued at the same level.
Based on the Price/Forward Earnings ratio of 21.15, the valuation of KMX can be described as rather expensive.
KMX's Price/Forward Earnings is on the same level as the industry average.
KMX's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.31 | ||
| Fwd PE | 21.15 |
4.2 Price Multiples
66.94% of the companies in the same industry are cheaper than KMX, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of KMX indicates a somewhat cheap valuation: KMX is cheaper than 66.94% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.59 | ||
| EV/EBITDA | 77.47 |
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 23.17% in the coming years.
PEG (NY)3.12
PEG (5Y)N/A
EPS Next 2Y17.74%
EPS Next 3Y23.17%
5. Dividend
5.1 Amount
No dividends for KMX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
CARMAX INC
NYSE:KMX (11/21/2024, 8:04:00 PM)
After market: 80.63 0 (0%)80.63
+3.97 (+5.18%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap12.49B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.31 | ||
| Fwd PE | 21.15 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.12
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.53% | ||
| ROE | 6.76% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 0.48% | ||
| PM (TTM) | 1.61% | ||
| GM | 10.62% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.95
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.96 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.25 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)2.7%
EPS 3Y-14.04%
EPS 5Y
EPS Q2Q%
EPS Next Y9.7%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-4.03%
Revenue growth 3Y11.88%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y