Carmax Inc

Consumer Discretionary
Retail-Auto Dealers and Gas Stations
www.carmax.com

Earnings Score
Moat Score
Safety Score

Market Cap $13.39B
PE 32
Debt $18.71B
Cash $1.25B
EV $30.85B
FCF $552.89M

Earnings

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Sales & Net Margins

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Earnings	$417.52M
EBIT	$681.64M
ROE	7%
ROA	2%
FCF	$552.89M
Equity	$6.18B
Growth Stability	52%
PE	32.08
PEG	-2.05
PB	2.17
P/FCF	24.23
P/S	0.52
Price/Cash	0.09
Debt/Equity	3.03
Debt/FCF	33.83
Net Margins	2%
Gross Margins	11%
Op. Margins	3%
Earnings CAGR	-2%
Sales Growth YoY	-1%
Sales Growth QoQ	-1%
Sales CAGR	9%
FCF CAGR	-1%
Equity CAGR	9%
Earnings Stability	0.05
Earnings Growth YoY	12%
Earnings Growth QoQ	-13%

Earnings CAGR 5Y	-16%
Sales CAGR 5Y	10%
FCF CAGR 5Y	-7%
Equity CAGR 5Y	13%
Earnings CAGR 3Y	-9%
Sales CAGR 3Y	-9%
FCF CAGR 3Y	-16%
Equity CAGR 3Y	8%
Market Cap	$13.39B
Revenue	$25.90B
Assets	$27.30B
Total Debt	$18.71B
Cash	$1.25B
Shares Outstanding	155.33M
EV	30.85B
Earnings Score	6%
Moat Score	54%
Safety Score	42%
Final Score	34%
Working Capital	2.7B
Current Ratio	2.25
Gross Profit	$2.75B
Shares Growth 3y	-1%
Equity Growth QoQ	0%
Equity Growth YoY	3%

Assets & ROA

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Stockholders Equity & ROE

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CarMax sells, finances, and services used and new cars through a chain of over 230 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 and wholesale about 13%, with the remaining portion composed of extended service plans and repair. In fiscal 2022, the company retailed and wholesaled 924,338 and 706,212 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 2021. It seeks over 5% share by the end of calendar 2025 and revenue between $33 billion to $45 billion by fiscal 2026. CarMax is based in Richmond, Virginia.

SEC Filings

Direct access to Carmax Inc (KMX) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-Q Aug 31
- 10-Q May 31
- 10-K Feb 29
2023
- 10-Q Nov 30
- 10-Q Aug 31
- 10-Q May 31
- 10-K Feb 28
2022
- 10-Q Nov 30
- 10-Q Aug 31
- 10-Q May 31
- 10-K Feb 28

Sector Comparison

How does Carmax Inc compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Carmax Inc compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR -2%

Stability 5%

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Carmax Inc Discounted Cash Flow

Fully customizable DCF calculator online for Carmax Inc.

Years

Calculation mode

= $5.2B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$553M	$548M	$543M	$538M	$533M	$528M	$524M	$519M	$514M	$509M	$505M	$5B
DCF		$498M	$449M	$404M	$364M	$328M	$296M	$266M	$240M	$216M	$195M	$1.9B
Value	$5.2B

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	02/2015	02/2016	02/2017	02/2018	02/2019	02/2020	02/2021	02/2022	02/2023	02/2024	TTM
Net Margins	4%	4%	4%	4%	5%	4%	4%	4%	2%	2%	2%
ROA	-	7%	7%	6%	6%	6%	5%	6%	3%	3%	2%
ROE	-	21%	20%	20%	25%	24%	17%	22%	9%	8%	7%

Bad Net Margins (2.02%)

Net Margins are too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	02/2015	02/2016	02/2017	02/2018	02/2019	02/2020	02/2021	02/2022	02/2023	02/2024	TTM
Debt over FCF	-	-23.63	-14.15	-35.8	-103.26	-27.09	30	-6.56	21.36	-2.81K	33.83
Debt over Equity	2.89	3.78	4.03	4.07	4.36	4.09	3.46	3.58	3.27	3.09	3.03
Growth Stability	-	-	-	100%	100%	100%	94%	100%	52%	60%	52%

Bad Debt/FCF ratio (33.83)

Net Margins are too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Bad Debt/Equity ratio (3.03)

The company is overleveraged and has a bad balance between equity and debt.

Bad Graham’s Stability (52%)

The company has a bad stability in its earnings, which is a sign of a bad competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	02/2015	02/2016	02/2017	02/2018	02/2019	02/2020	02/2021	02/2022	02/2023	02/2024	CAGR 5Y
Revenue YoY growth	-	6%	5%	8%	6%	12%	-7%	68%	-7%	-11%	10%
Earnings YoY growth	-	4%	1%	6%	27%	5%	-16%	54%	-58%	-1%	-16%
Equity YoY growth	-	-8%	7%	7%	1%	12%	16%	20%	7%	8%	13%
FCF YoY growth	-	-64%	91%	-57%	-62%	301%	-189%	-668%	-130%	-101%	-7%