CARMAX, INC.

KMX
Delayed Quote. Delayed  - 01/21 04:10:00 pm
108.1USD +1.92%

CarMax, Inc. : Back on an important level

01/13/2022 | 08:51am
Tommy Douziech
Junior Analyst

Strategy published on : 01/13/2022 | 08:51

long trade
Stop-loss triggered

Entry price : 120.19$
Target : 155$
Stop-loss : 106$
Potential : 28.96%

The selling pressure regarding CarMax, Inc. shares could subside shortly. In fact, the support area that is currently being tested around 118.67 USD has come into play and could, at least in the short term, keep the downside pressure at bay.
Investors have an opportunity to buy the stock and target the $ 155.

Summary

● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.

● Overall, and from a short-term perspective, the company presents an interesting fundamental situation.


Strengths

● The company has attractive valuation levels with a low EV/sales ratio compared with its peers.

● Over the past year, analysts have regularly revised upwards their sales forecast for the company.

● Over the last 4 months, analysts have significantly revised upwards the company's estimated sales.

● For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.

● Analysts have a positive opinion on this stock. Average consensus recommends overweighting or purchasing the stock.

● The difference between current prices and the average target price is rather important and implies a significant appreciation potential for the stock.

● Predictions on business development from analysts polled by Standard & Poor's are tight. This results from either a good visibility into core activities or accurate earnings releases.


Weaknesses

● As a percentage of sales and without taking into account depreciation and amortization, the company has relatively low margins.

● The company appears highly valued given the size of its balance sheet.

● Over the past twelve months, analysts' consensus has been significantly revised downwards.

● The price targets of various analysts who make up the consensus differ significantly. This reflects different assessments and/or a difficulty in valuing the company.

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