(KMX) CarMax - Ratings and Ratios

CarMax, Inc. (NYSE:KMX) is a leading U.S.-based retailer specializing in used vehicles and related automotive products. The company operates through two primary segments: CarMax Sales Operations and CarMax Auto Finance. CarMax Sales Operations offers a broad selection of used vehicles, including domestic, imported, luxury, hybrid, and electric models. Additionally, the segment provides used vehicle auctions, extended protection plans, and reconditioning services. CarMax Auto Finance extends financing options to retail customers across various credit profiles, leveraging partnerships with financial institutions to facilitate transactions. Headquartered in Richmond, Virginia, CarMax was established in 1993 and has grown to become one of the largest used car retailers in the United States, known for its customer-centric approach and no-haggle pricing model. The company operates over 230 stores nationwide and continues to expand its omnichannel sales platform, blending online and in-store experiences to enhance customer convenience.

From a financial perspective, CarMax Inc. (NYSE:KMX) is currently trading at $65.80, with a market capitalization of $9.516 billion. The stocks trailing P/E ratio stands at 19.42, while the forward P/E is 16.53, indicating expectations of earnings growth. The price-to-book ratio is 1.52, reflecting moderate valuation relative to book value. The price-to-sales ratio of 0.34 suggests the company is trading at a discount to its revenue. Return on equity (RoE) is 8.02%, indicating reasonable profitability. Technically, the stock is trading below its 20-day SMA of $71.94 and 50-day SMA of $76.10, with a 200-day SMA of $78.71, signaling potential bearish momentum. Average trading volume over the past 20 days is approximately 3.9 million shares, with an ATR of 3.95, indicating moderate volatility.

Over the next three months, CarMax is expected to face headwinds from macroeconomic factors such as rising interest rates and potential softening in consumer demand for used vehicles. However, the companys strong omni-channel platform and diversified financing options are likely to mitigate some of these risks. Technically, if the stock breaches support levels near $60, it could test lower levels, while resistance at $75 may cap upside momentum. Fundamentally, the companys ability to maintain margins and manage inventory turnover will be critical in navigating the current environment. Based on current trends, the stock is likely to trade in a range between $60 and $75 over the next quarter, with potential for modest downside if market conditions deteriorate further.