CarMax Inc. (KMX, Financial), the biggest used vehicles dealer in the U.S., will release the second-quarter 2018 financial results on Sept. 22 before the New York Stock Exchange opens.
For the quarter in question, analysts forecast CarMax will close the reporting period with an EPS of 94 cents on average. This represents a 6.8% increase from the EPS of the same quarter of fiscal 2017.
As you can see in the chart below, analysts’ estimates on CarMax’s second-quarter earnings range between a low of 91 cents and a high of $1.
Source: Yahoo Finance
The second quarter’s earnings are backed on revenue that for the quarter in question are expected by analysts to come in at $4.25 billion. This is an average figure and represents a 6.30% increase from the comparable of fiscal 2017.
Source: Yahoo Finance
As you can see in the chart above, estimates on CarMax's second quarter of fiscal 2018 revenue have been produced by 13 analysts who were surveyed. These estimates range between a low of $4.08 billion and a high of $4.39 billion.
A quick look at the most relevant figures of the company’s balance sheet indicates that CarMax had approximately $60.66 million in cash on hand and securities or 33 cents per share at the end of the first quarter of fiscal 2018. The total debt amounted to about $12.28 billion for a total debt-equity ratio of 389.42% versus an industry average of 111.26, signaling that the company’s balance sheet is highly leveraged.
According to the last quarter figures the current ratio is 2.34 which is higher than the industry average of 1.27. This means that CarMax can easily meet its short-term obligations with its liquidity and other current assets that can be readily converted into cash.
CarMax is currently trading at $68.89 per share with a market capitalization of $12.62 billion, a price-book (P/B) ratio of 4.04, a price-sales (P/S) ratio of 0.80, a price-earnings (P/E) ratio of 19.68 and an EV-EBITDA ratio of 19.17.
The forward P/E ratio is 18.45 that multiplied by an EPS – as forecasted by analysts for full fiscal 2018 – of $3.72, yields a value of $68.63 per share.
CarMax analysts have targeted a price of $69.93 per share they think the stock will reach within the 12-month trading period. Estimates on the target price per share range between a low of $53 and a high of $82. The recommendation rating is 2.4 out of 5.
Disclosure: I have no position in CarMax.
