CARMAX INC (KMX) Stock Fundamental Analysis
NYSE:KMX - New York Stock Exchange, Inc. - US1431301027 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to KMX. KMX was compared to 120 industry peers in the Specialty Retail industry. KMX has a medium profitability rating, but doesn't score so well on its financial health evaluation. KMX has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
KMX had positive earnings in the past year.
In the past year KMX had a positive cash flow from operations.
In the past 5 years KMX has always been profitable.
Of the past 5 years KMX 4 years had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 1.83%, KMX perfoms like the industry average, outperforming 55.83% of the companies in the same industry.
With a decent Return On Equity value of 8.02%, KMX is doing good in the industry, outperforming 64.17% of the companies in the same industry.
KMX's Return On Invested Capital of 0.62% is on the low side compared to the rest of the industry. KMX is outperformed by 60.83% of its industry peers.
KMX had an Average Return On Invested Capital over the past 3 years of 0.57%. This is significantly below the industry average of 13.01%.
The 3 year average ROIC (0.57%) for KMX is below the current ROIC(0.62%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.83% | ||
| ROE | 8.02% | ||
| ROIC | 0.62% |
ROA(3y)1.81%
ROA(5y)2.66%
ROE(3y)8.18%
ROE(5y)12.73%
ROIC(3y)0.57%
ROIC(5y)1.15%
1.3 Margins
Looking at the Profit Margin, with a value of 1.90%, KMX is in line with its industry, outperforming 56.67% of the companies in the same industry.
KMX's Profit Margin has declined in the last couple of years.
KMX has a Operating Margin (0.79%) which is comparable to the rest of the industry.
KMX's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 11.00%, KMX is doing worse than 95.00% of the companies in the same industry.
KMX's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 0.79% | ||
| PM (TTM) | 1.9% | ||
| GM | 11% |
OM growth 3Y-30.89%
OM growth 5Y-27.28%
PM growth 3Y-19.26%
PM growth 5Y-15.36%
GM growth 3Y2.19%
GM growth 5Y-3.87%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), KMX is destroying value.
The number of shares outstanding for KMX has been reduced compared to 1 year ago.
The number of shares outstanding for KMX has been reduced compared to 5 years ago.
KMX has a better debt/assets ratio than last year.
2.2 Solvency
KMX has an Altman-Z score of 1.60. This is a bad value and indicates that KMX is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of KMX (1.60) is worse than 65.83% of its industry peers.
The Debt to FCF ratio of KMX is 120.67, which is on the high side as it means it would take KMX, 120.67 years of fcf income to pay off all of its debts.
KMX has a Debt to FCF ratio of 120.67. This is in the lower half of the industry: KMX underperforms 60.00% of its industry peers.
KMX has a Debt/Equity ratio of 2.94. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of KMX (2.94) is worse than 74.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.94 | ||
| Debt/FCF | 120.67 | ||
| Altman-Z | 1.6 |
ROIC/WACC0.11
WACC5.74%
2.3 Liquidity
A Current Ratio of 2.31 indicates that KMX has no problem at all paying its short term obligations.
KMX has a better Current ratio (2.31) than 85.83% of its industry peers.
A Quick Ratio of 0.52 indicates that KMX may have some problems paying its short term obligations.
KMX has a Quick ratio of 0.52. This is comparable to the rest of the industry: KMX outperforms 50.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
KMX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.91%, which is quite good.
The Earnings Per Share has been decreasing by -9.31% on average over the past years.
The Revenue has decreased by -0.69% in the past year.
The Revenue has been growing slightly by 5.34% on average over the past years.
EPS 1Y (TTM)18.91%
EPS 3Y-22.26%
EPS 5Y-9.31%
EPS Q2Q%100%
Revenue 1Y (TTM)-0.69%
Revenue growth 3Y-6.17%
Revenue growth 5Y5.34%
Sales Q2Q%6.69%
3.2 Future
Based on estimates for the next years, KMX will show a very strong growth in Earnings Per Share. The EPS will grow by 34.42% on average per year.
Based on estimates for the next years, KMX will show a small growth in Revenue. The Revenue will grow by 4.88% on average per year.
EPS Next Y15.03%
EPS Next 2Y15.82%
EPS Next 3Y18.98%
EPS Next 5Y34.42%
Revenue Next Year4.69%
Revenue Next 2Y4.94%
Revenue Next 3Y5.49%
Revenue Next 5Y4.88%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 19.71, KMX is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of KMX indicates a somewhat cheap valuation: KMX is cheaper than 67.50% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.25, KMX is valued a bit cheaper.
KMX is valuated rather expensively with a Price/Forward Earnings ratio of 17.14.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KMX indicates a somewhat cheap valuation: KMX is cheaper than 64.17% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.15, KMX is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.71 | ||
| Fwd PE | 17.14 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KMX indicates a slightly more expensive valuation: KMX is more expensive than 68.33% of the companies listed in the same industry.
KMX's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 62.74 | ||
| EV/EBITDA | 56.17 |
4.3 Compensation for Growth
KMX's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as KMX's earnings are expected to grow with 18.98% in the coming years.
PEG (NY)1.31
PEG (5Y)N/A
EPS Next 2Y15.82%
EPS Next 3Y18.98%
5. Dividend
5.1 Amount
No dividends for KMX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
64.46
+1.46 (+2.32%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners110.68%
Inst Owner Change-2.16%
Ins Owners0.35%
Ins Owner Change4%
Market Cap9.82B
Analysts78.18
Price Target84.45 (31.01%)
Short Float %7.28%
Short Ratio3.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)14.8%
Min EPS beat(2)-2.08%
Max EPS beat(2)31.69%
EPS beat(4)2
Avg EPS beat(4)7.1%
Min EPS beat(4)-2.08%
Max EPS beat(4)31.69%
EPS beat(8)4
Avg EPS beat(8)6.73%
EPS beat(12)6
Avg EPS beat(12)2.59%
EPS beat(16)8
Avg EPS beat(16)4.36%
Revenue beat(2)2
Avg Revenue beat(2)1.25%
Min Revenue beat(2)0.5%
Max Revenue beat(2)1.99%
Revenue beat(4)3
Avg Revenue beat(4)0.64%
Min Revenue beat(4)-2.26%
Max Revenue beat(4)2.33%
Revenue beat(8)4
Avg Revenue beat(8)-0.48%
Revenue beat(12)5
Avg Revenue beat(12)-2.13%
Revenue beat(16)9
Avg Revenue beat(16)1.58%
PT rev (1m)-8.03%
PT rev (3m)-6.85%
EPS NQ rev (1m)0.26%
EPS NQ rev (3m)-3.51%
EPS NY rev (1m)-0.18%
EPS NY rev (3m)-3.75%
Revenue NQ rev (1m)0.67%
Revenue NQ rev (3m)1.95%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.71 | ||
| Fwd PE | 17.14 | ||
| P/S | 0.37 | ||
| P/FCF | 62.74 | ||
| P/OCF | 15.72 | ||
| P/B | 1.57 | ||
| P/tB | 1.61 | ||
| EV/EBITDA | 56.17 |
EPS(TTM)3.27
EY5.07%
EPS(NY)3.76
Fwd EY5.84%
FCF(TTM)1.03
FCFY1.59%
OCF(TTM)4.1
OCFY6.36%
SpS173
BVpS40.98
TBVpS40.06
PEG (NY)1.31
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.83% | ||
| ROE | 8.02% | ||
| ROCE | 0.82% | ||
| ROIC | 0.62% | ||
| ROICexc | 0.62% | ||
| ROICexgc | 0.63% | ||
| OM | 0.79% | ||
| PM (TTM) | 1.9% | ||
| GM | 11% | ||
| FCFM | 0.59% |
ROA(3y)1.81%
ROA(5y)2.66%
ROE(3y)8.18%
ROE(5y)12.73%
ROIC(3y)0.57%
ROIC(5y)1.15%
ROICexc(3y)0.58%
ROICexc(5y)1.16%
ROICexgc(3y)0.58%
ROICexgc(5y)1.16%
ROCE(3y)0.76%
ROCE(5y)1.54%
ROICexcg growth 3Y-35.83%
ROICexcg growth 5Y-27.01%
ROICexc growth 3Y-35.83%
ROICexc growth 5Y-27.09%
OM growth 3Y-30.89%
OM growth 5Y-27.28%
PM growth 3Y-19.26%
PM growth 5Y-15.36%
GM growth 3Y2.19%
GM growth 5Y-3.87%
F-Score7
Asset Turnover0.96
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.94 | ||
| Debt/FCF | 120.67 | ||
| Debt/EBITDA | 36.46 | ||
| Cap/Depr | 158.73% | ||
| Cap/Sales | 1.78% | ||
| Interest Coverage | 1.98 | ||
| Cash Conversion | 124.23% | ||
| Profit Quality | 31.27% | ||
| Current Ratio | 2.31 | ||
| Quick Ratio | 0.52 | ||
| Altman-Z | 1.6 |
F-Score7
WACC5.74%
ROIC/WACC0.11
Cap/Depr(3y)165.6%
Cap/Depr(5y)135.54%
Cap/Sales(3y)1.65%
Cap/Sales(5y)1.36%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)18.91%
EPS 3Y-22.26%
EPS 5Y-9.31%
EPS Q2Q%100%
EPS Next Y15.03%
EPS Next 2Y15.82%
EPS Next 3Y18.98%
EPS Next 5Y34.42%
Revenue 1Y (TTM)-0.69%
Revenue growth 3Y-6.17%
Revenue growth 5Y5.34%
Sales Q2Q%6.69%
Revenue Next Year4.69%
Revenue Next 2Y4.94%
Revenue Next 3Y5.49%
Revenue Next 5Y4.88%
EBIT growth 1Y-21.65%
EBIT growth 3Y-35.16%
EBIT growth 5Y-23.4%
EBIT Next Year47.76%
EBIT Next 3Y23.46%
EBIT Next 5Y31.99%
FCF growth 1Y2439.31%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y36.16%
OCF growth 3YN/A
OCF growth 5YN/A