Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified CarMax as such a stock due to the following factors:
- KMX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $159.1 million.
- KMX has traded 1,101 shares today.
- KMX is trading at a new lifetime high.
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More details on KMX:
CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles in the United States. It operates in two segments, CarMax Sales Operations and CarMax Auto Finance. KMX has a PE ratio of 23.6. Currently there are 8 analysts that rate CarMax a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for CarMax has been 1.9 million shares per day over the past 30 days. CarMax has a market cap of $12.0 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.39 and a short float of 8.6% with 6.02 days to cover. Shares are up 16.9% year-to-date as of the close of trading on Wednesday.
rates CarMax as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- KMX's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues rose by 10.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CARMAX INC has improved earnings per share by 12.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CARMAX INC increased its bottom line by earning $2.17 versus $1.87 in the prior year. This year, the market expects an improvement in earnings ($2.53 versus $2.17).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Specialty Retail industry average. The net income increased by 10.2% when compared to the same quarter one year prior, going from $140.27 million to $154.52 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, CARMAX INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full CarMax Ratings Report.