William Blair analyst Sharon Zackfia has reiterated their bullish stance on KMX stock, giving a Buy rating on June 18.
Confident Investing Starts Here:
- Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter
Sharon Zackfia’s rating is based on CarMax’s impressive financial performance, which exceeded expectations in multiple areas. The company’s first-quarter earnings per share (EPS) saw a significant increase of 43%, surpassing both her and the consensus estimates. This growth was driven by better-than-expected used unit comparable sales, retail gross profit per unit (GPU), and a reduction in selling, general, and administrative expenses (SG&A) as a percentage of gross profit.
CarMax’s comparable sales accelerated to 8.1%, outperforming the anticipated range of 6% to 7%, leading to a revenue growth of 6.1%, even with a slight decline in retail average selling prices (ASPs). Additionally, the GPU increased by $60 to $2,407, and the SG&A as a percentage of gross profit decreased significantly by 680 basis points to 73.8%, which was better than the expected 76.3%. These positive financial metrics contributed to the Buy rating given by Sharon Zackfia.
In another report released on June 18, Wedbush also maintained a Buy rating on the stock with a $90.00 price target.