CARMAX INC (KMX) Stock Fundamental Analysis
NYSE:KMX - New York Stock Exchange, Inc. - US1431301027 - Common Stock - Currency: USD
Overall KMX gets a fundamental rating of 4 out of 10. We evaluated KMX against 121 industry peers in the Specialty Retail industry. KMX has only an average score on both its financial health and profitability. KMX is not valued too expensively and it also shows a decent growth rate.
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.
Each year in the past 5 years KMX has been profitable.
Of the past 5 years KMX 4 years had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.83%, KMX is in line with its industry, outperforming 54.92% of the companies in the same industry.
Looking at the Return On Equity, with a value of 8.02%, KMX is in the better half of the industry, outperforming 65.57% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 0.62%, KMX is doing worse than 61.48% of the companies in the same industry.
KMX had an Average Return On Invested Capital over the past 3 years of 0.57%. This is significantly below the industry average of 12.99%.
The last Return On Invested Capital (0.62%) for KMX is above the 3 year average (0.57%), which is a sign of increasing profitability.
| 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
KMX's Profit Margin of 1.90% is in line compared to the rest of the industry. KMX outperforms 57.38% of its industry peers.
In the last couple of years the Profit Margin of KMX has declined.
With a Operating Margin value of 0.79%, KMX perfoms like the industry average, outperforming 41.80% of the companies in the same industry.
In the last couple of years the Operating Margin of KMX has declined.
Looking at the Gross Margin, with a value of 11.00%, KMX is doing worse than 93.44% of the companies in the same industry.
In the last couple of years the Gross Margin of KMX has declined.
| 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
KMX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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.
Compared to 1 year ago, KMX has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.63, we must say that KMX is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.63, KMX is doing worse than 61.48% of the companies in the same industry.
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 comparable to the rest of the industry: KMX outperforms 45.08% of its industry peers.
A Debt/Equity ratio of 2.94 is on the high side and indicates that KMX has dependencies on debt financing.
KMX's Debt to Equity ratio of 2.94 is on the low side compared to the rest of the industry. KMX is outperformed by 74.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.94 | ||
| Debt/FCF | 120.67 | ||
| Altman-Z | 1.63 |
ROIC/WACC0.1
WACC5.95%
2.3 Liquidity
KMX has a Current Ratio of 2.31. This indicates that KMX is financially healthy and has no problem in meeting its short term obligations.
KMX has a Current ratio of 2.31. This is amongst the best in the industry. KMX outperforms 86.07% of its industry peers.
KMX has a Quick Ratio of 2.31. This is a bad value and indicates that KMX is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.52, KMX is in line with its industry, outperforming 53.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 43.75% over the past year.
KMX shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -9.31% yearly.
Looking at the last year, KMX shows a decrease in Revenue. The Revenue has decreased by -0.69% in the last year.
The Revenue has been growing slightly by 5.34% on average over the past years.
EPS 1Y (TTM)43.75%
EPS 3Y-22.26%
EPS 5Y-9.31%
EPS Q2Q%42.27%
Revenue 1Y (TTM)-0.69%
Revenue growth 3Y-6.17%
Revenue growth 5Y5.34%
Sales Q2Q%6.09%
3.2 Future
The Earnings Per Share is expected to grow by 27.29% on average over the next years. This is a very strong growth
Based on estimates for the next years, KMX will show a small growth in Revenue. The Revenue will grow by 3.67% on average per year.
EPS Next Y15.33%
EPS Next 2Y16.44%
EPS Next 3Y18.98%
EPS Next 5Y27.29%
Revenue Next Year4.33%
Revenue Next 2Y4.68%
Revenue Next 3Y5.49%
Revenue Next 5Y3.67%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
KMX is valuated rather expensively with a Price/Earnings ratio of 18.63.
Based on the Price/Earnings ratio, KMX is valued a bit cheaper than 68.03% of the companies in the same industry.
KMX's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.35.
A Price/Forward Earnings ratio of 15.46 indicates a correct valuation of KMX.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KMX indicates a somewhat cheap valuation: KMX is cheaper than 63.11% of the companies listed in the same industry.
KMX is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.63 | ||
| Fwd PE | 15.46 |
4.2 Price Multiples
67.21% of the companies in the same industry are cheaper than KMX, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of KMX is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 66.74 | ||
| EV/EBITDA | 57.86 |
4.3 Compensation for Growth
The 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)1.22
PEG (5Y)N/A
EPS Next 2Y16.44%
EPS Next 3Y18.98%
5. Dividend
5.1 Amount
KMX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
68.57
+4.24 (+6.59%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners108.88%
Inst Owner Change-2.16%
Ins Owners0.37%
Ins Owner Change4%
Market Cap10.45B
Analysts78.18
Price Target84.45 (23.16%)
Short Float %8.48%
Short Ratio3.46
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)0%
PT rev (3m)-6.64%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.11%
EPS NY rev (1m)0.26%
EPS NY rev (3m)-3.5%
Revenue NQ rev (1m)-0.2%
Revenue NQ rev (3m)1.57%
Revenue NY rev (1m)-0.34%
Revenue NY rev (3m)0.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.63 | ||
| Fwd PE | 15.46 | ||
| P/S | 0.4 | ||
| P/FCF | 66.74 | ||
| P/OCF | 16.73 | ||
| P/B | 1.67 | ||
| P/tB | 1.71 | ||
| EV/EBITDA | 57.86 |
EPS(TTM)3.68
EY5.37%
EPS(NY)4.43
Fwd EY6.47%
FCF(TTM)1.03
FCFY1.5%
OCF(TTM)4.1
OCFY5.98%
SpS173
BVpS40.98
TBVpS40.06
PEG (NY)1.22
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 | 1.63 |
F-Score7
WACC5.95%
ROIC/WACC0.1
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)43.75%
EPS 3Y-22.26%
EPS 5Y-9.31%
EPS Q2Q%42.27%
EPS Next Y15.33%
EPS Next 2Y16.44%
EPS Next 3Y18.98%
EPS Next 5Y27.29%
Revenue 1Y (TTM)-0.69%
Revenue growth 3Y-6.17%
Revenue growth 5Y5.34%
Sales Q2Q%6.09%
Revenue Next Year4.33%
Revenue Next 2Y4.68%
Revenue Next 3Y5.49%
Revenue Next 5Y3.67%
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 5Y24.6%
FCF growth 1Y2439.31%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y36.16%
OCF growth 3YN/A
OCF growth 5YN/A