CARMAX INC (KMX) Stock Fundamental Analysis
USA - NYSE:KMX - US1431301027 - Common Stock
33.44 USD
+1.33 (+4.14%)
33.5 USD
+0.06 (+0.18%)
We assign a fundamental rating of 4 out of 10 to KMX. KMX was compared to 122 industry peers in the Specialty Retail industry. KMX has an average financial health and profitability rating. KMX has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year KMX was profitable.
KMX had a positive operating cash flow in the past year.
KMX had positive earnings in each of the past 5 years.
KMX had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
KMX's Return On Assets of 1.92% is in line compared to the rest of the industry. KMX outperforms 54.92% of its industry peers.
The Return On Equity of KMX (8.40%) is better than 64.75% of its industry peers.
KMX has a Return On Invested Capital (0.75%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for KMX is significantly below the industry average of 11.81%.
The last Return On Invested Capital (0.75%) for KMX is above the 3 year average (0.57%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.92% | ||
| ROE | 8.4% | ||
| ROIC | 0.75% |
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 1.98%, KMX is in the better half of the industry, outperforming 60.66% of the companies in the same industry.
In the last couple of years the Profit Margin of KMX has declined.
KMX has a Operating Margin of 0.94%. This is comparable to the rest of the industry: KMX outperforms 40.98% of its industry peers.
KMX's Operating Margin has declined in the last couple of years.
KMX's Gross Margin of 11.21% is on the low side compared to the rest of the industry. KMX is outperformed by 90.98% of its industry peers.
In the last couple of years the Gross Margin of KMX has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 0.94% | ||
| PM (TTM) | 1.98% | ||
| GM | 11.21% |
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
KMX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, KMX has less shares outstanding
KMX has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, KMX has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.51, we must say that KMX is in the distress zone and has some risk of bankruptcy.
KMX has a worse Altman-Z score (1.51) than 63.93% of its industry peers.
KMX has a debt to FCF ratio of 27.46. This is a negative value and a sign of low solvency as KMX would need 27.46 years to pay back of all of its debts.
KMX has a Debt to FCF ratio (27.46) which is in line with its industry peers.
A Debt/Equity ratio of 2.90 is on the high side and indicates that KMX has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.90, KMX is doing worse than 74.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.9 | ||
| Debt/FCF | 27.46 | ||
| Altman-Z | 1.51 |
ROIC/WACC0.21
WACC3.57%
2.3 Liquidity
KMX has a Current Ratio of 2.46. This indicates that KMX is financially healthy and has no problem in meeting its short term obligations.
KMX's Current ratio of 2.46 is amongst the best of the industry. KMX outperforms 86.89% of its industry peers.
KMX has a Quick Ratio of 1.06. This is a normal value and indicates that KMX is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.06, KMX is in the better half of the industry, outperforming 77.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.46 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
KMX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 43.61%, which is quite impressive.
The Earnings Per Share has been decreasing by -9.31% on average over the past years.
KMX shows a small growth in Revenue. In the last year, the Revenue has grown by 1.80%.
KMX shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.34% yearly.
EPS 1Y (TTM)43.61%
EPS 3Y-22.26%
EPS 5Y-9.31%
EPS Q2Q%16.47%
Revenue 1Y (TTM)1.8%
Revenue growth 3Y-6.17%
Revenue growth 5Y5.34%
Sales Q2Q%-5.97%
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 26.02% on average per year.
Based on estimates for the next years, KMX will show a small growth in Revenue. The Revenue will grow by 2.47% on average per year.
EPS Next Y1.55%
EPS Next 2Y7.85%
EPS Next 3Y13.91%
EPS Next 5Y26.02%
Revenue Next Year-0.9%
Revenue Next 2Y0.51%
Revenue Next 3Y1.27%
Revenue Next 5Y2.47%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
KMX is valuated reasonably with a Price/Earnings ratio of 8.75.
86.89% of the companies in the same industry are more expensive than KMX, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 25.51. KMX is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 8.79, the valuation of KMX can be described as reasonable.
Based on the Price/Forward Earnings ratio, KMX is valued cheaply inside the industry as 86.89% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of KMX to the average of the S&P500 Index (34.98), we can say KMX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.75 | ||
| Fwd PE | 8.79 |
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 68.03% of the companies listed in the same industry.
KMX's Price/Free Cash Flow ratio is rather cheap when compared to the industry. KMX is cheaper than 93.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.17 | ||
| EV/EBITDA | 40.99 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates KMX does not grow enough to justify the current Price/Earnings ratio.
KMX's earnings are expected to grow with 13.91% in the coming years. This may justify a more expensive valuation.
PEG (NY)5.65
PEG (5Y)N/A
EPS Next 2Y7.85%
EPS Next 3Y13.91%
5. Dividend
5.1 Amount
KMX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
33.44
+1.33 (+4.14%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners108.45%
Inst Owner Change-9.07%
Ins Owners0.39%
Ins Owner Change4.74%
Market Cap4.91B
Revenue(TTM)26.37B
Net Income(TTM)521.07M
Analysts70.43
Price Target56.88 (70.1%)
Short Float %11.38%
Short Ratio2.78
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)4.71%
Min EPS beat(2)-7.28%
Max EPS beat(2)16.69%
EPS beat(4)2
Avg EPS beat(4)9.75%
Min EPS beat(4)-7.28%
Max EPS beat(4)31.69%
EPS beat(8)4
Avg EPS beat(8)2.9%
EPS beat(12)6
Avg EPS beat(12)6.72%
EPS beat(16)8
Avg EPS beat(16)1.87%
Revenue beat(2)0
Avg Revenue beat(2)-3.81%
Min Revenue beat(2)-7.05%
Max Revenue beat(2)-0.57%
Revenue beat(4)2
Avg Revenue beat(4)-1.28%
Min Revenue beat(4)-7.05%
Max Revenue beat(4)1.99%
Revenue beat(8)3
Avg Revenue beat(8)-1.53%
Revenue beat(12)4
Avg Revenue beat(12)-2.44%
Revenue beat(16)7
Avg Revenue beat(16)-1.22%
PT rev (1m)-16.2%
PT rev (3m)-31.94%
EPS NQ rev (1m)-15.04%
EPS NQ rev (3m)-28.88%
EPS NY rev (1m)-17%
EPS NY rev (3m)-15.8%
Revenue NQ rev (1m)-1.62%
Revenue NQ rev (3m)-6.84%
Revenue NY rev (1m)-0.38%
Revenue NY rev (3m)-4.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.75 | ||
| Fwd PE | 8.79 | ||
| P/S | 0.19 | ||
| P/FCF | 7.17 | ||
| P/OCF | 4.06 | ||
| P/B | 0.79 | ||
| P/tB | 0.81 | ||
| EV/EBITDA | 40.99 |
EPS(TTM)3.82
EY11.42%
EPS(NY)3.8
Fwd EY11.37%
FCF(TTM)4.66
FCFY13.95%
OCF(TTM)8.23
OCFY24.6%
SpS179.56
BVpS42.22
TBVpS41.26
PEG (NY)5.65
PEG (5Y)N/A
Graham Number60.24
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.92% | ||
| ROE | 8.4% | ||
| ROCE | 1% | ||
| ROIC | 0.75% | ||
| ROICexc | 0.77% | ||
| ROICexgc | 0.77% | ||
| OM | 0.94% | ||
| PM (TTM) | 1.98% | ||
| GM | 11.21% | ||
| FCFM | 2.6% |
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%
ROICexgc growth 3Y-35.83%
ROICexgc 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-Score9
Asset Turnover0.97
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.9 | ||
| Debt/FCF | 27.46 | ||
| Debt/EBITDA | 31.83 | ||
| Cap/Depr | 165.22% | ||
| Cap/Sales | 1.98% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 213.61% | ||
| Profit Quality | 131.47% | ||
| Current Ratio | 2.46 | ||
| Quick Ratio | 1.06 | ||
| Altman-Z | 1.51 |
F-Score9
WACC3.57%
ROIC/WACC0.21
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)43.61%
EPS 3Y-22.26%
EPS 5Y-9.31%
EPS Q2Q%16.47%
EPS Next Y1.55%
EPS Next 2Y7.85%
EPS Next 3Y13.91%
EPS Next 5Y26.02%
Revenue 1Y (TTM)1.8%
Revenue growth 3Y-6.17%
Revenue growth 5Y5.34%
Sales Q2Q%-5.97%
Revenue Next Year-0.9%
Revenue Next 2Y0.51%
Revenue Next 3Y1.27%
Revenue Next 5Y2.47%
EBIT growth 1Y102.18%
EBIT growth 3Y-35.16%
EBIT growth 5Y-23.4%
EBIT Next Year61.19%
EBIT Next 3Y15.69%
EBIT Next 5Y23.17%
FCF growth 1Y118.02%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y62.68%
OCF growth 3YN/A
OCF growth 5YN/A
CARMAX INC / KMX FAQ
What is the ChartMill fundamental rating of CARMAX INC (KMX) stock?
ChartMill assigns a fundamental rating of 4 / 10 to KMX.
What is the valuation status of CARMAX INC (KMX) stock?
ChartMill assigns a valuation rating of 6 / 10 to CARMAX INC (KMX). This can be considered as Fairly Valued.
What is the profitability of KMX stock?
CARMAX INC (KMX) has a profitability rating of 4 / 10.
What is the valuation of CARMAX INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for CARMAX INC (KMX) is 8.75 and the Price/Book (PB) ratio is 0.79.
What is the earnings growth outlook for CARMAX INC?
The Earnings per Share (EPS) of CARMAX INC (KMX) is expected to grow by 1.55% in the next year.