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CarMax Inc (NYSE:KMX)
Median P/S Value
$35.04 (As of Today)

This valuation method assumes that the stock valuation will revert to its historical mean in terms of Price/Sales Ratio. The reason we use P/S Ratio instead of P/E Ratio or P/B Ratio is because Price/Sales Ratio is independent of profit margin, and can be applied to a broader range of situations.

Median P/S Value is calculated as trailing twelve months (TTM) revenue per share times 10-Year median P/S ratio. CarMax Inc's revenue per share for the trailing twelve months (TTM) ended in Feb. 2014 was $55.25. CarMax Inc's 10-Year median P/S ratio is 0.65. Therefore, the Median P/S Value for today is $35.04.

As of today, CarMax Inc's share price is $43.52. CarMax Inc's median P/S value is $35.04. Therefore, CarMax Inc's Price to Median P/S Value Ratio for today is 1.24.

KMX' s 10-Year Price to Median P/S Value Range
Min: 0.07   Max: 2.98
Current: 1.24

0.07
2.98

During the past 13 years, the highest Price to Median P/S Value Ratio of CarMax Inc was 2.98. The lowest was 0.07. And the median was 0.85.

KMX's Price to Median P/S Value is ranked higher than
53% of the 1104 Companies
in the Global Auto & Truck Dealerships industry.

( Industry Median: 1.10 vs. KMX: 1.24 )

Definition

CarMax Inc's Median P/S Value for today is calculated as

Median P/S Value=Total Annual Sales / Shares Outstanding*10-Year Median P/S Ratio
=Revenue per Share (TTM)*10-Year Median P/S Ratio
=55.25*0.65
=35.91

10-Year Median P/S Ratio is 0.65.
CarMax Inc's revenue per share for the trailing twelve months (TTM) ended in Feb. 2014 was 14.49 (May. 2013 ) + 14.26 (Aug. 2013 ) + 12.93 (Nov. 2013 ) + 13.57 (Feb. 2014 ) = $55.25.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

This valuation method assumes that the stock valuation will revert to its historical mean in terms of Price/Sales Ratio. The reason we use P/S Ratio instead of P/E Ratio or P/B Ratio is because Price/Sales Ratio is independent of profit margin, and can be applied to a broader range of situations.

It also assumes that over time the profit margin is constant. If a company increases its profit margin to a sustainable level, this value might under-estimate its value. If it has permanent declined profit margins, this may over-estimate the company’s value.

CarMax Inc's Price to Median P/S Value Ratio for today is calculated as

Price to Median P/S Value=Share Price/Median P/S Value
=43.52/35.91
=1.21

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

P/E Ratio, P/B Ratio, P/S Ratio, Intrinsic Value (DCF Projected), Intrinsic Value (DCF), Intrinsic Value (DE), Graham Number, GAVA


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

CarMax Inc Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
medpsvalue 16.1819.1322.3924.1720.6721.8525.6428.1830.740.00

CarMax Inc Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
medpsvalue 27.6128.1828.4028.8429.7430.7432.3833.9135.040.00
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