Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. As of today (2023-09-27), CarMax's Beta is 1.17.
CarMax Beta Historical Data
The historical data trend for CarMax's Beta can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
* Premium members only.
CarMax Annual Data
Trend
Feb14
Feb15
Feb16
Feb17
Feb18
Feb19
Feb20
Feb21
Feb22
Feb23
Beta
1.16
0.91
1.56
1.70
1.69
CarMax Quarterly Data
Aug18
Nov18
Feb19
May19
Aug19
Nov19
Feb20
May20
Aug20
Nov20
Feb21
May21
Aug21
Nov21
Feb22
May22
Aug22
Nov22
Feb23
May23
Beta
1.69
1.61
1.59
1.69
1.17
Competitive Comparison
For the Auto & Truck Dealerships subindustry, CarMax's Beta, along with its competitors' market caps and Beta data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
CarMax Beta Distribution
For the Vehicles & Parts industry and Consumer Cyclical sector, CarMax's Beta distribution charts can be found below:
* The bar in red indicates where CarMax's Beta falls in comparison to its industry or sector. The grey bar indicates the Beta's extreme value range as defined by GuruFocus.
CarMax Beta Calculation
Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. A stock's beta can be calculated by dividing the product of the covariance of the individual stock's returns and the market's returns by the variance of the market's returns over a specified period. Basically, GuruFocus uses the returns calculated over three-year period.
CarMax (NYSE:KMX) Beta Explanation
Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. We usually compare beta to 1. A beta of 1 indicates that the security's price will move with the market. A beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 indicates that the security's price will be more volatile than the market.
Beta is primarily used in the Capital Asset Pricing Model (CAPM) to calculate the Cost of Equity, which can be used in the calculation of WACC %. The formula of Cost of Equity is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
CarMax Beta Related Terms
Thank you for viewing the detailed overview of CarMax's Beta provided by GuruFocus.com. Please click on the following links to see related term pages.
CarMax sells, finances, and services used and new cars through a chain of about 240 used retail stores. It was formed in 1993 as a unit of Circuit City and spun off into an independent company in late 2002. Used-vehicle sales typically account for about 83% of revenue (78% in fiscal 2023 due to the chip shortage) and wholesale about 13% (20% in fiscal 2023), with the remaining portion composed of extended service plans and repair. In fiscal 2023, the company retailed and wholesaled 807,823, and 585,071 used vehicles, respectively. CarMax is the largest used-vehicle retailer in the U.S. but still estimates that it has only about 4% U.S. market share of vehicles 0-10 years old in 2022. It seeks over 5% share by the end of calendar 2025. CarMax is based in Richmond, Virginia.
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