Retail

What to Expect From CarMax Earnings

CarMax Inc. (NYSE: KMX) will report its fiscal first-quarter financial results Friday before the markets open. The consensus estimates from Thomson Reuters call for $0.86 in earnings per share (EPS) on $4.15 billion in revenue. In the same period from last year, the specialty retailer posted EPS of $0.76 and revenue of $3.75 billion.

CarMax has benefited from the huge need for consumers to replace their cars and trucks after years of waiting. The company excels in the pre-owned area, and business looks solid for the rest of 2015. Though CarMax does not offer the same manufacturer used car incentives, it does have its own coverage to encourage people to buy used. The company was recently named one of Fortune magazine’s 100 best companies to work for. CarMax continues to grow and has plans to open between 10 and 15 stores each year for the next several years.

With a slow but sure economy, and some degree of job and wage growth, many analysts on Wall Street feel that the company has solid upside potential.

Back in April, 24/7 Wall St. noted that at a time when prices at the pump had fallen sharply over the course of about a year, more people were considering purchasing cars. However, new cars are fairly expensive, so the alternative would be to buy used cars, which CarMax specializes in. Coincidentally, the used-auto retailer just posted a record quarter.

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A few analysts weighed in on CarMax recently:

  • Oppenheimer reiterated a Buy rating with a $77 price target.
  • Sterne Agee CRT initiated coverage with a Buy rating and an $87 price target.
  • Wolfe Research upgraded CarMax to Market Perform from Underperform.

Shares of CarMax were up 0.6% at $72.69 on Thursday. The stock has a consensus analyst price target of $76.64 and a 52-week trading range of $43.27 to $75.40.

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