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 $69.0 million.
- KMX has traded 2.4 million 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 25.8. Currently there are 7 analysts that rate CarMax a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for CarMax has been 1.0 million shares per day over the past 30 days. CarMax has a market cap of $11.5 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.82 and a short float of 3% with 4.45 days to cover. Shares are up 36.5% year to date as of the close of trading on Friday.
rates CarMax as a
. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, good cash flow from operations, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- CARMAX INC has improved earnings per share by 23.1% 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 $1.87 versus $1.79 in the prior year. This year, the market expects an improvement in earnings ($2.20 versus $1.87).
- Despite its growing revenue, the company underperformed as compared with the industry average of 21.6%. Since the same quarter one year prior, revenues rose by 19.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has increased to -$77.58 million or 32.84% when compared to the same quarter last year. In addition, CARMAX INC has also modestly surpassed the industry average cash flow growth rate of 29.87%.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 60.30% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.
- 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.
- You can view the full CarMax Ratings Report.