NYSE:KMX

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles in the United States.


Snowflake Analysis

Acceptable track record with imperfect balance sheet.


Similar Companies

Share Price & News

How has CarMax's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: KMX's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

5.8%

KMX

3.7%

US Specialty Retail

2.9%

US Market


1 Year Return

16.6%

KMX

3.6%

US Specialty Retail

8.9%

US Market

Return vs Industry: KMX exceeded the US Specialty Retail industry which returned 1.9% over the past year.

Return vs Market: KMX exceeded the US Market which returned 9.2% over the past year.


Shareholder returns

KMXIndustryMarket
7 Day5.8%3.7%2.9%
30 Day27.6%17.7%10.6%
90 Day9.6%1.0%5.1%
1 Year16.6%16.6%5.0%3.6%11.4%8.9%
3 Year56.2%56.2%28.9%22.7%34.3%25.4%
5 Year27.8%27.8%22.2%11.8%60.7%42.7%

Price Volatility Vs. Market

How volatile is CarMax's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is CarMax undervalued compared to its fair value and its price relative to the market?

17.28x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: KMX ($93.13) is trading above our estimate of fair value ($72.79)

Significantly Below Fair Value: KMX is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: KMX is poor value based on its PE Ratio (17.3x) compared to the Specialty Retail industry average (14.8x).

PE vs Market: KMX is poor value based on its PE Ratio (17.3x) compared to the US market (16.1x).


Price to Earnings Growth Ratio

PEG Ratio: KMX's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: KMX is overvalued based on its PB Ratio (4x) compared to the US Specialty Retail industry average (1.2x).


Next Steps

Future Growth

How is CarMax forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

-3.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KMX's earnings are forecast to decline over the next 3 years (-3.1% per year).

Earnings vs Market: KMX's earnings are forecast to decline over the next 3 years (-3.1% per year).

High Growth Earnings: KMX's earnings are forecast to decline over the next 3 years.

Revenue vs Market: KMX's revenue is expected to decline over the next 3 years (-1.9% per year).

High Growth Revenue: KMX's revenue is forecast to decline over the next 3 years (-1.9% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KMX's Return on Equity is forecast to be low in 3 years time (17.1%).


Next Steps

Past Performance

How has CarMax performed over the past 5 years?

8.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KMX has high quality earnings.

Growing Profit Margin: KMX's current net profit margins (4.1%) are lower than last year (4.4%).


Past Earnings Growth Analysis

Earnings Trend: KMX's earnings have grown by 8.8% per year over the past 5 years.

Accelerating Growth: KMX's earnings growth over the past year (5.4%) is below its 5-year average (8.8% per year).

Earnings vs Industry: KMX earnings growth over the past year (5.4%) exceeded the Specialty Retail industry -5.6%.


Return on Equity

High ROE: Whilst KMX's Return on Equity (23.57%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is CarMax's financial position?


Financial Position Analysis

Short Term Liabilities: KMX's short term assets ($3.7B) exceed its short term liabilities ($1.5B).

Long Term Liabilities: KMX's short term assets ($3.7B) do not cover its long term liabilities ($15.8B).


Debt to Equity History and Analysis

Debt Level: KMX's debt to equity ratio (408%) is considered high.

Reducing Debt: KMX's debt to equity ratio has increased from 278.2% to 408% over the past 5 years.

Debt Coverage: KMX's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: KMX's interest payments on its debt are well covered by EBIT (14.9x coverage).


Balance Sheet


Next Steps

Dividend

What is CarMax's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate KMX's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate KMX's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if KMX's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if KMX's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of KMX's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure


CEO

Bill Nash (50yo)

3.75yrs

Tenure

US$9,400,666

Compensation

Mr. William D. Nash, also known as Bill, has been the Chief Executive Officer of CarMax, Inc. since September 2016 and its President since February 1, 2016. Mr. Nash served as an Executive Vice President o ...


CEO Compensation Analysis

Compensation vs Market: Bill's total compensation ($USD9.40M) is about average for companies of similar size in the US market ($USD11.58M).

Compensation vs Earnings: Bill's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
William Nash
President3.75yrsUS$9.40m0.074% $11.2m
Enrique Mayor-Mora
Senior VP & CFO0.67yrUS$1.55m0.0011% $166.6k
Edwin Hill
Executive VP & COO1.83yrsUS$3.53m0.0074% $1.1m
Eric Margolin
Executive VP12.58yrsUS$2.80m0.015% $2.3m
James Lyski
Executive VP & Chief Marketing Officer5.83yrsUS$2.34m0.0052% $785.8k
Thomas Reedy
Executive Vice President of Finance0.67yrUS$3.52m0.025% $3.7m
Jill Livesay
VP, Chief Accounting Officer & Controller3.58yrsno data0.0043% $655.6k
Shamim Mohammad
Senior VP and Chief Information & Technology Officer2.42yrsno data0.0053% $796.4k
Stacy Frole
Vice President of Investor Relations1.42yrsno datano data
Trina Lee
Assistant Vice President of Public Affairs & Communicationsno datano datano data

2.4yrs

Average Tenure

52.5yo

Average Age

Experienced Management: KMX's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
William Nash
President3.75yrsUS$9.40m0.074% $11.2m
Thomas Folliard
Non-Executive Chairman3.83yrsUS$436.38k0.13% $19.1m
Ronald Blaylock
Independent Director12.67yrsUS$291.88k0.014% $2.2m
Shira Goodman
Independent Director12.67yrsUS$280.97k0.016% $2.5m
Mitchell Steenrod
Lead Independent Director1yrUS$322.81k0.011% $1.7m
Sona Chawla
Independent Director3.17yrsUS$266.72k0.0015% $224.1k
Robert Hombach
Independent Director2.17yrsUS$286.97k0.000020% $3.0k
Peter Bensen
Independent Director2.17yrsUS$308.72k0.0031% $466.4k
David McCreight
Independent Director2yrsUS$276.97kno data
Marcella Shinder
Independent Director5.17yrsUS$265.97k0.0044% $663.2k

3.5yrs

Average Tenure

54.5yo

Average Age

Experienced Board: KMX's board of directors are considered experienced (3.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: KMX insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

CarMax, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: CarMax, Inc.
  • Ticker: KMX
  • Exchange: NYSE
  • Founded: 1993
  • Industry: Automotive Retail
  • Sector: Retail
  • Market Cap: US$15.142b
  • Shares outstanding: 162.58m
  • Website: https://www.carmax.com

Number of Employees


Location

  • CarMax, Inc.
  • 12800 Tuckahoe Creek Parkway
  • Richmond
  • Virginia
  • 23238
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KMXNYSE (New York Stock Exchange)YesCommon StockUSUSDFeb 1997
XA4DB (Deutsche Boerse AG)YesCommon StockDEEURFeb 1997
KMX *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNFeb 1997
0HTQLSE (London Stock Exchange)YesCommon StockGBUSDFeb 1997
K1MX34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 COMBRBRLJan 2020

Biography

CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles in the United States. The company operates in two segments, CarMax Sales Operations and CarMax Auto Finance. It offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles; vehicles that do not meet its retail standards to licensed dealers through on-site wholesale auctions; and extended protection plans to customers at the time of sale. The company also provides reconditioning and vehicle repair services; and financing alternatives for retail customers across a range of credit spectrum through its CarMax Auto Finance and arrangements with various financial institutions. As of February 29, 2020, it operated approximately 216 stores and 2 new car franchises. CarMax, Inc. was founded in 1993 and is based in Richmond, Virginia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/05 02:40
End of Day Share Price2020/06/04 00:00
Earnings2020/02/29
Annual Earnings2020/02/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.