CarMax Earnings: What To Look For From KMX

Used automotive vehicle retailer Carmax (NYSE:KMX) will be reporting earnings tomorrow morning. Here’s what investors should know.

CarMax beat analysts’ revenue expectations by 2.7% last quarter, reporting revenues of $7.01 billion, flat year on year. It was a very strong quarter for the company, with a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ gross margin estimates.

Is CarMax a buy or sell going into earnings? Read our full analysis here, it’s free .

This quarter, analysts are expecting CarMax’s revenue to decline 1.6% year on year to $6.05 billion, improving from the 5.5% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.60 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. CarMax has missed Wall Street’s revenue estimates five times over the last two years.

Looking at CarMax’s peers in the automotive and marine retail segment, only AutoZone has reported results so far. It missed analysts’ revenue estimates by 0.6%, delivering year-on-year sales growth of 2.1%. The stock traded up 0.5% on the results.

Read our full analysis of AutoZone’s earnings results here .

There has been positive sentiment among investors in the automotive and marine retail segment, with share prices up 9.1% on average over the last month. CarMax is up 10.8% during the same time and is heading into earnings with an average analyst price target of $84.83 (compared to the current share price of $83.40).

When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares. .