CARMAX INC (KMX) Stock Fundamental Analysis
NYSE:KMX - New York Stock Exchange, Inc. - US1431301027 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to KMX. KMX was compared to 120 industry peers in the Specialty Retail industry. While KMX seems to be doing ok healthwise, there are quite some concerns on its profitability. KMX is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year KMX was profitable.
In the past year KMX had a positive cash flow from operations.
KMX had positive earnings in each of the past 5 years.
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
With a Return On Assets value of 1.69%, KMX perfoms like the industry average, outperforming 54.70% of the companies in the same industry.
KMX has a Return On Equity of 7.42%. This is in the better half of the industry: KMX outperforms 63.25% of its industry peers.
With a Return On Invested Capital value of 0.48%, KMX is not doing good in the industry: 63.25% of the companies in the same industry are doing better.
The Average Return On Invested Capital over the past 3 years for KMX is significantly below the industry average of 12.30%.
| 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's Profit Margin of 1.77% is in line compared to the rest of the industry. KMX outperforms 55.56% of its industry peers.
In the last couple of years the Profit Margin of KMX has declined.
KMX's Operating Margin of 0.62% is on the low side compared to the rest of the industry. KMX is outperformed by 60.68% of its industry peers.
In the last couple of years the Operating Margin of KMX has declined.
KMX has a Gross Margin of 10.84%. This is amonst the worse of the industry: KMX underperforms 94.02% of its industry peers.
KMX's Gross Margin has declined in the last couple of years.
| 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
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.
The number of shares outstanding for KMX has been reduced compared to 5 years ago.
The debt/assets ratio for KMX has been reduced compared to a year ago.
2.2 Solvency
KMX has an Altman-Z score of 1.68. This is a bad value and indicates that KMX is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of KMX (1.68) is worse than 64.10% of its industry peers.
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 42.73% of its industry peers.
A Debt/Equity ratio of 2.95 is on the high side and indicates that KMX has dependencies on debt financing.
KMX's Debt to Equity ratio of 2.95 is on the low side compared to the rest of the industry. KMX is outperformed by 74.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.95 | ||
| Debt/FCF | 55.94 | ||
| Altman-Z | 1.68 |
ROIC/WACC0.07
WACC6.77%
2.3 Liquidity
A Current Ratio of 2.30 indicates that KMX has no problem at all paying its short term obligations.
With an excellent Current ratio value of 2.30, KMX belongs to the best of the industry, outperforming 86.32% of the companies in the same industry.
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.
The Quick ratio of KMX (0.55) is comparable to the rest of the 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%.
KMX shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -10.50% yearly.
Looking at the last year, KMX shows a decrease in Revenue. The Revenue has decreased by -2.46% in the last year.
KMX shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.87% yearly.
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
KMX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.28% yearly.
EPS Next Y18.98%
EPS Next 2Y19.21%
EPS Next 3Y22.66%
EPS Next 5Y31.26%
Revenue Next Year-1.87%
Revenue Next 2Y0.77%
Revenue Next 3Y2.48%
Revenue Next 5Y3.28%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 28.00, KMX can be considered very expensive at the moment.
KMX's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of KMX to the average of the S&P500 Index (29.63), we can say KMX is valued inline with the index average.
With a Price/Forward Earnings ratio of 21.14, KMX is valued on the expensive side.
KMX's Price/Forward Earnings ratio is in line with the industry average.
KMX's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28 | ||
| Fwd PE | 21.14 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, KMX is valued a bit more expensive than 70.09% of the companies in the same industry.
KMX's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.64 | ||
| EV/EBITDA | 71.2 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
KMX's earnings are expected to grow with 22.66% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.48
PEG (5Y)N/A
EPS Next 2Y19.21%
EPS Next 3Y22.66%
5. Dividend
5.1 Amount
No dividends for KMX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
82.61
-2.99 (-3.49%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners110.68%
Inst Owner Change1.42%
Ins Owners0.35%
Ins Owner Change0%
Market Cap12.71B
Analysts74.55
Price Target90.66 (9.74%)
Short Float %7.87%
Short Ratio6.49
Dividend
| Industry Rank | Sector 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)15.02%
Min EPS beat(2)-1.65%
Max EPS beat(2)31.69%
EPS beat(4)2
Avg EPS beat(4)-1.17%
Min EPS beat(4)-35.13%
Max EPS beat(4)31.69%
EPS beat(8)5
Avg EPS beat(8)17.4%
EPS beat(12)6
Avg EPS beat(12)0.89%
EPS beat(16)9
Avg EPS beat(16)4.5%
Revenue beat(2)2
Avg Revenue beat(2)2.16%
Min Revenue beat(2)1.99%
Max Revenue beat(2)2.33%
Revenue beat(4)2
Avg Revenue beat(4)-0.45%
Min Revenue beat(4)-3.87%
Max Revenue beat(4)2.33%
Revenue beat(8)3
Avg Revenue beat(8)-1.33%
Revenue beat(12)5
Avg Revenue beat(12)-2.05%
Revenue beat(16)8
Avg Revenue beat(16)1.47%
PT rev (1m)2.43%
PT rev (3m)8.38%
EPS NQ rev (1m)20.6%
EPS NQ rev (3m)3.29%
EPS NY rev (1m)7.91%
EPS NY rev (3m)8.46%
Revenue NQ rev (1m)2.49%
Revenue NQ rev (3m)1.24%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)1.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28 | ||
| Fwd PE | 21.14 | ||
| P/S | 0.49 | ||
| P/FCF | 37.64 | ||
| P/OCF | 16.13 | ||
| P/B | 2.05 | ||
| P/tB | 2.09 | ||
| EV/EBITDA | 71.2 |
EPS(TTM)2.95
EY3.57%
EPS(NY)3.91
Fwd EY4.73%
FCF(TTM)2.19
FCFY2.66%
OCF(TTM)5.12
OCFY6.2%
SpS168.9
BVpS40.38
TBVpS39.47
PEG (NY)1.48
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 | 2.95 | ||
| 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 | 1.68 |
F-Score6
WACC6.77%
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 Y18.98%
EPS Next 2Y19.21%
EPS Next 3Y22.66%
EPS Next 5Y31.26%
Revenue 1Y (TTM)-2.46%
Revenue growth 3Y11.88%
Revenue growth 5Y7.87%
Sales Q2Q%1.22%
Revenue Next Year-1.87%
Revenue Next 2Y0.77%
Revenue Next 3Y2.48%
Revenue Next 5Y3.28%
EBIT growth 1Y-46.55%
EBIT growth 3Y-16.05%
EBIT growth 5Y-18.77%
EBIT Next Year43.71%
EBIT Next 3Y20.89%
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%