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CarMax Inc KMX Stock Quote

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NYSE: KMX

Morningstar‘s Stock Analysis KMX

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Is it the right time to buy or sell?

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5-Star Price

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Economic Moat

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Capital Allocation

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We Believe CarMax's Free Cash Flow Will Improve When Inventory Becomes Cheaper

David Whiston Sector Strategist

Business Strategy and Outlook

| David Whiston |

CarMax's revenue has increased at a compound annual rate of about 13% since fiscal 2000 because of the success of customer-friendly sales practices and use of information technology. The firm targets between a 12%-19% annual growth rate for fiscal 2021 to fiscal 2026. Competing dealerships have tried no-haggle pricing and failed because their salesforces are trained to focus on selling vehicles that earn the highest possible gross profit rather than vehicles that customers actually want or need. A traditional dealership relies on profits from service to offset the typically lower margins it gets on new-vehicle sales. CarMax does not hire salespeople from the auto industry, and salespeople receive the same commission regardless of the vehicle sold. They do not even know the profit on the vehicle sold. The CarMax customer stays with the same salesperson throughout the transaction rather than being passed off to a finance department, receiving a buying experience that is hard to match at a dealership. This focus on customer satisfaction, combined with scale advantages that allow for a wide inventory selection and extensive pricing data, create a narrow economic moat.

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Key Statistics KMX

Company Profile KMX

Business Description

CarMax sells, finances, and services used and new cars through a chain of over 230 used retail stores. It was formed in 1993 as a unit of Circuit City and spun off into an independent company in late 2002. Used-vehicle sales typically account for about 83% of revenue and wholesale about 13%, with the remaining portion composed of extended service plans and repair. In fiscal 2022, the company retailed and wholesaled 924,338 and 706,212 used vehicles, respectively. CarMax is the largest used-vehicle retailer in the U.S. but still estimates that it has only about 4% U.S. market share of vehicles 0-10 years old in 2021. It seeks over 5% share by the end of calendar 2025 and revenue between $33 billion to $45 billion by fiscal 2026. CarMax is based in Richmond, Virginia.

Contact
12800 Tuckahoe Creek Parkway
Richmond, VA, 23238
Industry Auto & Truck Dealerships
Employees 32,647

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FAQs for CarMax Inc Stock

No. KMX does not currently have a forward dividend yield.
Dividend yield allows investors, particularly those interested in dividend-paying stocks, to compare the relationship between a stock’s price and how it rewards stockholders through dividends. The formula for calculating dividend yield is to divide the annual dividend paid per share by the stock price.

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KMX’s market cap is 10.36 Bil.
Market capitalization is calculated by taking a company’s share price and multiplying it by the total number of shares. It’s often used to measure a company’s size. In the Morningstar Style Box, large-cap names account for the largest 70% of U.S. stocks, mid-cap names account for the largest 70–90%, and small-cap names are the remaining 10% of companies.

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KMX’s stock style is Mid Core.
Style is an investment factor that has a meaningful impact on investment risk and returns. Style is calculated by combining value and growth scores, which are first individually calculated.

High-growth stocks tend to represent the technology, healthcare, and communications sectors. They rarely distribute dividends to shareholders, opting for reinvestment in their businesses. More value-oriented stocks tend to represent financial services, utilities, and energy stocks. These are established companies that reliably pay dividends.

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KMX’s price/sales is 0.32.
Price/sales represents the amount an investor is willing to pay for a dollar generated from a particular company’s sales or revenues.

KMX’s price/forward earnings is 13.59.
Forward P/E gives some indication of how cheap or expensive a stock is compared with consensus earnings estimates. The lower the Forward P/E, the cheaper the stock.

KMX’s price/book is 1.91.
Price/book ratio can tell investors approximately how much they’re paying for a company’s assets, based on historical, rather than current, valuations. Historical valuations generally do not reflect a company’s current market value. Value investors frequently look for companies that have low price/book ratios.

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KMX’s beta can be found in Trading Information at the top of this page.
A stock’s beta measures how closely tied its price movements have been to the performance of the overall market.

Compare KMX’s historical performance against its industry peers and the overall market.