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CARMAX INC (KMX) Stock Fundamental Analysis

NYSE:KMX - New York Stock Exchange, Inc. - US1431301027 - Common Stock - Currency: USD

80.09  +1.82 (+2.33%)

Fundamental Rating

3

KMX gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 119 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. While showing a medium growth rate, KMX is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

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3

1. Profitability

1.1 Basic Checks

In the past year KMX was profitable.
KMX had a positive operating cash flow in the past year.
KMX had positive earnings in each of the past 5 years.
In multiple years KMX reported negative operating cash flow during the last 5 years.
KMX Yearly Net Income VS EBIT VS OCF VS FCFKMX Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 1B -1B -2B

1.2 Ratios

KMX's Return On Assets of 1.69% is in line compared to the rest of the industry. KMX outperforms 56.03% 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 63.79% of the companies in the same industry.
The Return On Invested Capital of KMX (0.48%) is worse than 62.93% 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 12.38%.
Industry RankSector 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%
KMX Yearly ROA, ROE, ROICKMX Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5 10 15 20 25

1.3 Margins

Looking at the Profit Margin, with a value of 1.77%, KMX is in line with its industry, outperforming 56.03% of the companies in the same industry.
KMX's Profit Margin has declined in the last couple of years.
The Operating Margin of KMX (0.62%) is worse than 60.34% of its industry peers.
In the last couple of years the Operating Margin of KMX has declined.
KMX has a worse Gross Margin (10.84%) than 93.97% of its industry peers.
KMX's Gross Margin has declined in the last couple of years.
Industry RankSector 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%
KMX Yearly Profit, Operating, Gross MarginsKMX Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2 4 6 8 10

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4

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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
Compared to 1 year ago, KMX has an improved debt to assets ratio.
KMX Yearly Shares OutstandingKMX Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M 200M
KMX Yearly Total Debt VS Total AssetsKMX Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B 20B 25B

2.2 Solvency

KMX has an Altman-Z score of 1.65. This is a bad value and indicates that KMX is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.65, KMX is not doing good in the industry: 64.66% of the companies in the same industry are doing better.
KMX has a debt to FCF ratio of 55.94. This is a negative value and a sign of low solvency as KMX would need 55.94 years to pay back of all of its debts.
KMX has a Debt to FCF ratio of 55.94. This is comparable to the rest of the industry: KMX outperforms 42.24% of its industry peers.
KMX has a Debt/Equity ratio of 2.95. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of KMX (2.95) is worse than 74.14% of its industry peers.
Industry RankSector Rank
Debt/Equity 2.95
Debt/FCF 55.94
Altman-Z 1.65
ROIC/WACC0.07
WACC6.63%
KMX Yearly LT Debt VS Equity VS FCFKMX Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 5B 10B 15B

2.3 Liquidity

A Current Ratio of 2.30 indicates that KMX has no problem at all paying its short term obligations.
KMX has a better Current ratio (2.30) than 85.34% of its industry peers.
A Quick Ratio of 0.55 indicates that KMX may have some problems paying its short term obligations.
The Quick ratio of KMX (0.55) is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 2.3
Quick Ratio 0.55
KMX Yearly Current Assets VS Current LiabilitesKMX Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B

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4

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 2.79% over the past year.
The earnings per share for KMX have been decreasing by -10.50% on average. This is quite bad
KMX shows a decrease in Revenue. In the last year, the revenue decreased by -2.46%.
The Revenue has been growing slightly by 7.87% on average over the past years.
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

Based on estimates for the next years, KMX will show a very strong growth in Earnings Per Share. The EPS will grow by 31.26% on average per year.
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-1.85%
Revenue Next 2Y0.72%
Revenue Next 3Y2.4%
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.
KMX Yearly Revenue VS EstimatesKMX Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 10B 20B 30B
KMX Yearly EPS VS EstimatesKMX Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2 4 6 8 10

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2

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 27.15, which means the current valuation is very expensive for KMX.
Compared to the rest of the industry, the Price/Earnings ratio of KMX is on the same level as its industry peers.
KMX's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.19.
With a Price/Forward Earnings ratio of 20.96, KMX is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KMX indicates a somewhat cheap valuation: KMX is cheaper than 60.34% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of KMX to the average of the S&P500 Index (24.37), we can say KMX is valued inline with the index average.
Industry RankSector Rank
PE 27.15
Fwd PE 20.96
KMX Price Earnings VS Forward Price EarningsKMX Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 100 200 300

4.2 Price Multiples

KMX's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. KMX is more expensive than 69.83% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of KMX is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 36.52
EV/EBITDA 68.7
KMX Per share dataKMX EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 50 100 150

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates KMX does not grow enough to justify the current Price/Earnings ratio.
A more expensive valuation may be justified as KMX's earnings are expected to grow with 21.66% in the coming years.
PEG (NY)2.65
PEG (5Y)N/A
EPS Next 2Y17.87%
EPS Next 3Y21.66%

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0

5. Dividend

5.1 Amount

No dividends for KMX!.
Industry RankSector Rank
Dividend Yield N/A

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CARMAX INC

NYSE:KMX (1/23/2025, 11:27:59 AM)

80.09

+1.82 (+2.33%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)12-19 2024-12-19/bmo
Earnings (Next)N/A N/A
Inst Owners111.98%
Inst Owner Change-0.09%
Ins Owners0.35%
Ins Owner Change0%
Market Cap12.33B
Analysts74.55
Price Target86.85 (8.44%)
Short Float %8.59%
Short Ratio6.69
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend0.14
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)6.11%
PT rev (3m)8.94%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-14.36%
EPS NY rev (1m)0%
EPS NY rev (3m)0.67%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.22%
Revenue NY rev (1m)0.72%
Revenue NY rev (3m)1.76%
Valuation
Industry RankSector Rank
PE 27.15
Fwd PE 20.96
P/S 0.47
P/FCF 36.52
P/OCF 15.65
P/B 1.98
P/tB 2.03
EV/EBITDA 68.7
EPS(TTM)2.95
EY3.68%
EPS(NY)3.82
Fwd EY4.77%
FCF(TTM)2.19
FCFY2.74%
OCF(TTM)5.12
OCFY6.39%
SpS168.78
BVpS40.36
TBVpS39.44
PEG (NY)2.65
PEG (5Y)N/A
Profitability
Industry RankSector 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 RankSector Rank
Debt/Equity 2.95
Debt/FCF 55.94
Debt/EBITDA 41.1
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 1.65
F-Score6
WACC6.63%
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-1.85%
Revenue Next 2Y0.72%
Revenue Next 3Y2.4%
Revenue Next 5Y3.28%
EBIT growth 1Y-46.55%
EBIT growth 3Y-16.05%
EBIT growth 5Y-18.77%
EBIT Next Year43.18%
EBIT Next 3Y20.46%
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%