CarMax (NYSE:KMX) shares are trending nearly 6% higher in the early session today after the automotive retailer delivered a better-than-anticipated bottom line for the third quarter. In addition, it announced the resumption of its share buyback program.
Revenue declined by 5.5% year-over-year to $6.1 billion, lagging expectations by $190 million. On the other hand, EPS of $0.52 outpaced estimates by $0.10. During the quarter, retail used unit sales declined by 2.9% and comparable store used unit sales dropped by 4.1%.
Despite persistent pressures in the used car industry, the company witnessed a 7.7% uptick in wholesale unit sales. Still, average selling prices trended lower across used vehicles and wholesale vehicles during the quarter.
Importantly, CarMax resumed share repurchases after a gap of nearly one year. The company bought back shares worth $41.9 million in Q3 and had $2.41 billion remaining under its outstanding repurchase authorization.
Is KMX a Good Stock to Buy?
Overall, the Street has a Hold consensus rating on CarMax. Following a nearly 18% rise in the company’s share price over the past month, the average KMX price target of $75.89 implies that the stock might be fairly valued.
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