The Insider Activity Of CarMax Inc. (KMX) Is Worth Monitoring

CarMax Inc. (NYSE:KMX) finished Friday with an addition of $1.53 to close at $143.43, an upside of 1.08 percent. An average of 649,660 shares of common stock have been traded in the last five days. There was a gain of $6.64 in the past week, and it reached a new high 27 times over the past 12 months. The last 20 days have seen an average of 1,286,270 shares traded, while the 50-day average volume stands at 1,025,030.

KMX stock has increased by 0.89% in the last month. The company shares reached their 1-month lowest point of $121.65 on 10/05/21. With the stock rallying to its 52-week high on 09/29/21, shares of the company touched a low of $84.70 and a high of $147.73 in 52 weeks. It has reached a new high 25 times so far this year and achieved 51.84% or $48.97 in price. In spite of this, the price is down -2.91% from the 52-week high.


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Insider Transactions

81 days have passed since CarMax Inc. (KMX) last reported insider trading activity. Lyski James, who is EVP & Chief Marketing Officer, most recently acquired $63,129 shares at $139.54 per share on Aug 03. In this transaction, the insider spent $8,809,021. EVP and CITO, Shamim Mohammad, disposed of 22,434 shares at a price of $135.64 on Jul 21. The insider now owns more than $3,042,945 worth of shares. Prior to that, Director BLAYLOCK RONALD E went on to Sale 12,500 shares at $132.02 each on Jul 16. An amount of $1,650,250 was transacted.

Valuation Metrics

CarMax Inc. (KMX) has a trailing price-to-earnings (P/E) ratio of 20.39, which compares with the 15.45 for the broader industry and 32.04 for the sector. In the last five years, CarMax Inc.’s PE ratio has ranged between 30.58 and 8.306. The stock’s beta is 1.54. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.89, the price-to-book (PB) ratio at 4.76.

The quick ratio of CarMax Inc. for the three months ended May 30 was 0.60, and the current ratio was 2.70, indicating that the company is not able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 3.41 and a total debt to equity ratio of 3.52 for the quarter ending May 30. CarMax Inc.’s EBITDA margin for the year ending May 30 is 2.75%, while its operating margin for the same period stands at 5.80%. Its gross profit as reported stood at $2.38 billion compared to revenue of $18.95 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, CarMax Inc.’s return on assets was 5.20%. For the broader industry, ROE averaged 10.14 over the past year.

Earnings Surprise

For the three-month period that ended May 30, CarMax Inc. had $14.44 billion in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $285.27 million in the quarter, while revenues of $436.76 million were shrunk -4.01%. The analyst consensus anticipated CarMax Inc.’s latest quarter earnings to come in at $1.63 per share, but it turned out to be $2.63, a 61.30% surprise. For the quarter, EBITDA amounted to $455.39 million. Shareholders own equity worth $162.11 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at CarMax Inc. (KMX) price momentum. RSI 9-day as of the close on 22 October was 71.75%, suggesting the stock is Overbought, with historical volatility in this time frame at 13.54%.

As of today, KMX’s price is $139.98 +4.85% or $6.64 from its 5-day moving average. KMX is currently trading -0.69% lower than its 20-day SMA and +25.05% higher than its 100-day SMA. However, the stock’s current price level is +10.89% above the SMA50 and +43.00% above the SMA200.

The stochastic %K and %D were 93.29% and 89.74%, respectively, and the average true range (ATR) was 3.44. With the 14-day stochastic at 95.69% and the average true range at 3.60, the RSI (14) stands at 64.45%. The stock has reached 3.82 on the 9-day MACD Oscillator while the 14-day reading was at 6.73.

Analyst Ratings

The consensus rating for CarMax Inc. (KMX) among analysts is Overweight. According to current brokerage recommendations, 1 brokerage firm advise that investors sell KMX, while 7 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 1 analysts, while 9 others rate it as a “buy”.

What is KMX’s price target for the next 12 months?

Analysts predict a range of price targets between $90.00 and $185.00, with a median target of $155.00. Taking a look at these predictions, the average price target given by analysts for CarMax Inc. (KMX) stock is $149.08.

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