CarMax (KMX) and Its Peers Financial Comparison

CarMax (NYSE: KMX) is one of 20 public companies in the “Automotive dealers & gasoline service stations” industry, but how does it compare to its competitors? We will compare CarMax to similar companies based on the strength of its risk, dividends, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Insider & Institutional Ownership

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64.7% of shares of all “Automotive dealers & gasoline service stations” companies are held by institutional investors. 1.9% of CarMax shares are held by company insiders. Comparatively, 15.8% of shares of all “Automotive dealers & gasoline service stations” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares CarMax and its competitors revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
CarMax $17.12 billion $664.11 million 15.88
CarMax Competitors $8.01 billion $220.42 million 12.23

CarMax has higher revenue and earnings than its competitors. CarMax is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

CarMax has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500. Comparatively, CarMax’s competitors have a beta of 9.96, indicating that their average stock price is 896% more volatile than the S&P 500.

Profitability

This table compares CarMax and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CarMax 3.88% 21.09% 4.02%
CarMax Competitors 3.22% 33.52% 3.60%

Analyst Recommendations

This is a breakdown of current ratings and price targets for CarMax and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CarMax 0 5 11 0 2.69
CarMax Competitors 116 608 661 28 2.43

CarMax presently has a consensus price target of $79.00, suggesting a potential upside of 34.41%. As a group, “Automotive dealers & gasoline service stations” companies have a potential upside of 18.47%. Given CarMax’s stronger consensus rating and higher possible upside, research analysts clearly believe CarMax is more favorable than its competitors.

Summary

CarMax beats its competitors on 8 of the 13 factors compared.

About CarMax

CarMax, Inc. (CarMax) is a holding company. The Company is a retailer of used vehicles. The Company operates through two segments: CarMax Sales Operations and CarMax Auto Finance (CAF). The Company’s CarMax Sales Operations segment consists of all aspects of its auto merchandising and service operations, excluding financing provided by CAF. The Company’s CAF segment consists of its own finance operation that provides vehicle financing through CarMax stores. The Company operates approximately 160 used car stores in over 70 metropolitan markets. The Company’s products and services include retail merchandising, wholesale auctions, extended protection plans (EPPs), reconditioning and service, and customer credit. The Company’s CarMax Sales Operations segment sells used vehicles, purchases used vehicles from customers and other sources, sells related products and services, and arranges financing options for customers. CAF operates in the auto finance sector of the consumer finance market.

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