NYSE:KMX
$20.77
(2/9 11:58AM)
+2.2%
| Open | $20.89 |
Mkt Cap | $4.5 Billion |
| High | $20.89 |
52Wk High | $24.75 |
| Low | $20.4 |
52Wk Low | $8.40 |
| Volume | 880,363 |
Avg Vol 10D | 1.5 Million |
Ockham's Rating/Recommendation Summary
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KMX Revenue
Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, KMX the high and low end of the Price to Sales per share ratios are 0.75x and 0.33x respectively.
Notice that KMX's current Price to Sales per share ratio is 0.63x, which is significantly above its historical average. This places KMX at the upper end of its historical range relative to sales per share and makes it difficult to suggest an attractive price outlook. At current sales per share levels, we would need to see a decline in the Price to Sales ratio of 17% merely to return KMX to its historical average.
KMX Cash Earnings
As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of KMX, Ockham views their current Cash Earnings as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for KMX, the current level of Cash Earnings compared to its historical levels helps identify where KMX is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 29.68 and a historical low Cash Earnings per share ratio of 12.45, an investor can relate where value becomes optimal.
So with KMX's current price (latest close of $20.24) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, KMX is 29% below its average level of Price to Cash Earnings on a historical basis. This means that investors were willing to pay for a much higher stock price than currently for the same level of Cash in the past, on a relative basis. There are a couple of important things to remember, however. First, value doesn't exist in a vacuum. So if the market doesn't recognize this value, even a great disparity in Price to Cash Earnings cannot force an immediate stock price reaction. Second, patience is key when looking at securities that have reached these levels of Price to Cash Earnings versus their historical norms. So be patient with KMX.
KMX Dividends
When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for KMX to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.
See Who is Talking About News from KMX on Closing Bell
The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to Carmax, Incorporated.
When looking at our entire coverage universe and ranking stocks by the attention they receive on RazorWire, it is clear that Carmax, Incorporated has been talked about more than normal recently. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Carmax, Incorporated will perform just about the same as the index. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on KMX.
“… Magna international rising here the big upgrade earlier in the day and then CARMAX, in terms of the used car market they, got slammed through the clunker program but they are ... …”
KMX's EPS discussed on Power Lunch
KMX's earnings per share was discussed on Power Lunch which means there is something significant going on. Profits are the metric we pay the most attention to in our methodology.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, KMX has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on KMX. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Carmax, Incorporated will perform just about the same as the index.
“… Check in on CARMAX, off its highs but strong gains. Beat on the top and bottom lines with earnings. Eps 33 cents a share, touched a new high of 23. …”
News on KMX From the Pundits on Power Lunch
Staying informed on the news is invaluable for investors, and RazorWire has captured a recently discussion on KMX from Power Lunch.
The Ockham valuation currently has a Fairly Valued stance on KMX because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Carmax, Incorporated has actually sunk a bit in comparison to the others. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards KMX and think that it will generally perform in-line with the S&P 500.
“… CARMAX came out and turned a profit in the third quarter compared to a loss from last year. And that's spilling over into autonation. …”
Earnings Per Share at KMX Were on the Docket at Squawk On The Street
Squawk On The Street discussed earnings per share, which is one of the metrics we look at most closely. At Ockham, anytime earnings are discussed we must pay attention.
Carmax, Incorporated receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. We noticed recently that in comparison to all other stocks we analyze in the news; KMX has received less coverage from the financial media in business television and blogs. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral.
“… CARMAX posted strongier sales, cost-cutting efforts and gains from its financing the fourth-quarter profit falling as fewer travelers book cruises during the recession, but lower ... …”
KMX Back in the News on Fox Business
After a month of relative quiet from KMX, they have appeared back in the news.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, KMX has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on KMX. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Carmax, Incorporated will perform just about the same as the index.
“… brian: like CARMAX? > > yeah, I still like CARMAX. > > brian: and even sales, they look better, but they're not great. We're looking at 11 million units sold for the year? …”
Investors Sentiment's Effect on Carmax, Incorporated on Fox Business
Sentiment and investors' opinions on KMX were covered on Fox Business recently and RazorWire has captured the news segment.
Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards KMX and think that it will generally perform in-line with the S&P 500. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Carmax, Incorporated has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on KMX because it trades within the price range that we would expect given current market conditions and fundamentals.
“… So don't get your advice from, at least some names, like a CARMAX, they've got a buy rating don't be worried about the big move up? …”
Carmax, Incorporated (KMX) Discussed on CNBC's Power Lunch
Carmax, Incorporated is in the news. Find out how this impacts KMX trading on Ockham Research.
These are close to a record high you see september of last year. Because the prices have been moving higher, it has been a big help to companies like car max. All the retailers are take a look at that chart over a heck of a mover year to date for CARMAX. So why the increase? Well, used car prices are pushed higher for mainly the main reason being a tight supply. There are fewer trade ins for new vehicles and that's limiting the used vehicle supply. Also the weak economy has a lot of owners driving their older cars longer. Not trading them in and as a result, though running used car auctions have never seen a surge in prices like this. Take a look at the manheim index. When we talked to them, they do not expect this situation to change. >> the supply situation is not as a matter of fact, it probably gets a little bit worse if you go further out in like 2011 and 2012. We're not producing used vehicles today. >> by the way, he also tells me this they expect prices to correct maybe 3% to 4%. They're starting to pull back a little bit. Don't expect a huge correction. For more on the used car market and why these high prices are here to stay, check out the blog behind the wheel.
“… So why the increase? Well, used car prices are pushed higher for mainly the main reason being a tight supply. There are fewer trade ins for new vehicles and that's limiting the used vehicle supply. Also the weak economy has a lot of owners driving their older cars longer. Not trading them in and as a result, though running used car auctions have never seen a surge in prices like this. Take a look at the manheim index. When we talked to them, they do not expect this situation to change. >> the supply situation is not as a matter of fact, it probably gets a little bit worse if you go further out in like 2011 and 2012. We're not producing used vehicles today. >> by the way, he also tells me this they expect prices to correct maybe 3% to 4%. They're starting to pull back a little bit. Don't expect a huge correction. For more on the used car market and why these high prices are here to stay, check out the blog behind the wheel. …”
Carmax, Incorporated (KMX) Discussed on Fox Business's Money For Breakfast
Carmax, Incorporated is in the news. Find out how this impacts KMX trading on Ockham Research.
>> the area that we like to go into when we feel like we're in a recovery is what we call emerging franchises so companies that are a little bit more volatile, skewed to the upside so you buy them when they are down and hope to see a recovery. A company like CARMAX for jenna: it is over several different sectors you are not sector specific here as far as preferring one sector over >> more the type of company, you are looking at something more volatile so you can get it at a lower price when it's going down and hope to see more when it we're looking for a point where we're going to hold the stock for a while. The more volatile the better. Jenna: paul krugman in the new york times today has an accomplished. What he's talking about is the mission is not accomplished here as far as an economic recovery. Paul krugman, economist, has said we need more stimulus money, we need another round. How would that affect the way are you securing your portfolio with the thought maybe you could see more government >> yeah, I think the fear we have and the fear that I think a lot of investors are starting to have is where do the lines cross between stimulus spending being a positive, and it turns to
“… ike CARMAX for jenna: it is over several different sectors you are not sector specific here as far as preferring one sector over >> more the type of company, you are looking at something more volatile so you can get it at a lower price when it's going down and hope to see more when it we're looking for a point where we're going to hold the stock for a while. The more volatile the better. Jenna: paul krugman in the new york times today has an accomplished. What he's talking about is the mission is not accomplished here as far as an economic recovery. Paul krugman, economist, has said we need more stimulus money, we need another round. How would that affect the way are you securing your portfolio with the thought maybe you could see more government >> yeah, I think the fear we have and the fear that I think a lot of investors are starting to have is where do the lines cross between stimulus spending being a positive, and it turns to …”
Carmax, Incorporated (KMX) Discussed on Fox Business's The Opening Bell on Fox Business
Carmax, Incorporated is in the news. Find out how this impacts KMX trading on Ockham Research.
Bell and the high end range which is 2.6 billion. Also, gross margins are higher and the stocks, they open up near or at a new 52-week high. At least two upgrades and deutche bank and could be more. CARMAX, he mentioned this, obviously, on yesterday when report. Not necessarily moving, but it's interesting, goldman sachs upgrades the stock today to neutral from sell. We're talking about a stock up 165% and they had a sell rating the whole time so any individual investors who feel bad about themselves, don't worry a lot of people get it wrong all the time even the zen masters. Comfort, a look at the mover, heating and ventilation and air conditioning company is actually going to replace, asset p small caps and a lot of managers have to buy the stock up 7%. Hp fuller, pretty good news. Last night in fact 48 cents the street was looking candidates and the analyst and key bank have pricing power and imagine that, lower material costs didn't hurt either. And xilinx, another company, it's going into earnings season, they see 10% revenue rise before the range 2 to 6% and they fight all market strength and all
“… report. Not necessarily moving, but it's interesting, goldman sachs upgrades the stock today to neutral from sell. We're talking about a stock up 165% and they had a sell rating the whole time so any individual investors who feel bad about themselves, don't worry a lot of people get it wrong all the time even the zen masters. Comfort, a look at the mover, heating and ventilation and air conditioning company is actually going to replace, asset p small caps and a lot of managers have to buy the stock up 7%. Hp fuller, pretty good news. Last night in fact 48 cents the street was looking candidates and the analyst and key bank have pricing power and imagine that, lower material costs didn't hurt either. And xilinx, another company, it's going into earnings season, they see 10% revenue rise before the range 2 to 6% and they fight all market strength and all …”
Carmax, Incorporated (KMX) Discussed on CNBC's Closing Bell
Carmax, Incorporated is in the news. Find out how this impacts KMX trading on Ockham Research.
Estimates, at the low end of their range. $is 124 to $134. The street looking for $134. CARMAX topped estimates, conagra raised full year forecast. Google shares, the price target got raised today to $560. That from a cancord adams. The dow closing higher. >> nice to see you, sir. >> i'm going to hand it back to maria bartiromo. >> we are talking with the prime minister of poland. We have vaclav klaus coming on the show. So nice to meet you. >> you never know who you are going to run into on the floor of the new york stock exchange. The prime minister of hungry stopping by the set. I'm going to sit down with the president of the czech republic. Vaclav klaus to weigh in on a recent policy shift from the u.S. In terms of the foreign we get his thoughts on that as
“… . >> nice to see you, sir. >> i'm going to hand it back to maria bartiromo. >> we are talking with the prime minister of poland. We have vaclav klaus coming on the show. So nice to meet you. >> you never know who you are going to run into on the floor of the new york stock exchange. The prime minister of hungry stopping by the set. I'm going to sit down with the president of the czech republic. Vaclav klaus to weigh in on a recent policy shift from the u.S. In terms of the foreign we get his thoughts on that as …”