|
Related Topics
|
Category: Carmax (KMX)
Date: 4 April 2021 Stock price of Carmax (KMX) : $123.31 Market Capital of Carmax (KMX): $20.08 billion We take a a look at the 4th quarter 2021 earnings report of Carmax (KMX) the nation’s largest retailer of used cars, revolutionized the automotive retail industry by driving integrity, honesty and transparency in every interaction. During the fiscal year ending February 28, 2021, CarMax sold more than 750,000 used cars and more than 425,000 wholesale vehicles at its in-store and virtual auctions
|
|
Our YouTube channel is now live. Watch short summary videos of our articles
We are extremely proud of what we have accomplished this year and how the strategic changes we have made to our business position us for accelerated growth across retail, wholesale and CarMax Auto Finance -Bill Nash, president and chief executive officer."
More About Carmax (KMX)
CarMax, the nation’s largest retailer of used cars, revolutionized the automotive retail industry by driving integrity, honesty and transparency in every interaction. The company offers a truly personalized experience with the option for customers to do as much, or as little, online and in-store as they want. CarMax also provides a variety of vehicle delivery methods, including home delivery, contactless curbside pickup and appointments in its stores. During the fiscal year ending February 28, 2021, CarMax sold more than 750,000 used cars and more than 425,000 wholesale vehicles at its in-store and virtual auctions. In addition, CarMax Auto Finance originated more than $6 billion in receivables during fiscal year 2021, adding to its near $14 billion portfolio. CarMax has 220 stores, over 25,000 Associates, and is proud to have been recognized for 16 consecutive years as one of the Fortune 100 Best Companies to Work For®
Overview of Carmax (KMX) 4th quarter 2021 earnings
Fourth Quarter Highlights and Recent Developments:
- Net sales and operating revenues increased 4.1% to $5.16 billion when compared with the prior year fourth quarter. Net earnings decreased 2.3% to $209.9 million and net earnings per diluted share decreased 2.3% to $1.27 compared with the prior year quarter.
- Total used unit sales and unit sales in comparable stores decreased 0.9% and 2.3%, respectively, and wholesale units decreased 1.2% when compared with the prior year quarter. Total used, comparable store unit, and wholesale unit sales were positive for the quarter when excluding the impact of calendar shifts. Sales impacted by the delay in tax refunds and severe weather.
- On a two-year stack, total used and comparable store unit sales were up 13.8% and 8.7%, respectively.
- Robust used unit sales growth in March 2021 when compared with COVID-impacted March 2020 and a record March 2019. Increase supported by the initial distribution of tax refund and stimulus checks, improved weather, and favorable customer response to digital enhancements and strategic initiatives.
- CarMax Auto Finance (CAF) income increased 68.2% due to the combined effects of favorable loan loss performance, higher net interest margin and an increase in average managed receivables.
- Three-quarters of our customers advanced their transaction digitally, with approximately 25% of our customers eligible to buy a vehicle online independently.
- Completed nationwide rollout of online instant appraisal offer on carmax.com, positioning us to become the largest online buyer of used autos from consumers and strengthening our leadership as the largest used auto buyer from consumers.
- Signed a definitive agreement to acquire Edmunds, further strengthening our role and reach across the used auto ecosystem while adding exceptional technology and creative talent.
Carmax (KMX) management commentary on 4th quarter 2021 earnings
RICHMOND, Va.--(BUSINESS WIRE)-- CarMax, Inc. (NYSE:KMX), the nation’s largest and most profitable retailer of used cars, today reported results for the fourth quarter and fiscal year ended February 28, 2021.
CEO Commentary:
“We are extremely proud of what we have accomplished this year and how the strategic changes we have made to our business position us for accelerated growth across retail, wholesale and CarMax Auto Finance,” said Bill Nash, president and chief executive officer. “Our omni-channel experience and Love Your Car Guarantee further enhance the most customer-centric offering on the market today. Additionally, the rapid adoption of our online instant appraisal offer positions us to become the largest online buyer of used autos from consumers.
“The acquisition of Edmunds will further strengthen the role and reach of both companies,” continued Nash. “Our partnership to date has proven to be an outstanding combination as we’ve developed innovative products, including an online instant appraisal offer on both edmunds.com and carmax.com. We look forward to collaborating on new products and initiatives leveraging Edmunds’ industry-leading content and technology expertise to serve both CarMax and Edmunds’ customers.”
Nash concluded by stating, “We have the technology, data, talent, physical assets and scale to unlock opportunities across the used auto ecosystem. We’re excited about the future as we expect robust top line, bottom line and market share growth for the upcoming year.”
Share Repurchase Activity. We repurchased 0.7 million shares of common stock for $66.3 million pursuant to our share repurchase program during the fourth quarter of fiscal 2021. As of February 28, 2021, we had $1.34 billion remaining available for repurchase under the outstanding authorization.
Fiscal 2022 Capital Spending Plan. We estimate capital expenditures will increase to approximately $350 million in fiscal 2022, up from $164.5 million in fiscal 2021 and $331.9 million in fiscal 2020. The increase in planned capital spending in fiscal 2022 reflects several factors, including continued spending on technology and the opening of 10 new locations.
CEO Commentary:
“We are extremely proud of what we have accomplished this year and how the strategic changes we have made to our business position us for accelerated growth across retail, wholesale and CarMax Auto Finance,” said Bill Nash, president and chief executive officer. “Our omni-channel experience and Love Your Car Guarantee further enhance the most customer-centric offering on the market today. Additionally, the rapid adoption of our online instant appraisal offer positions us to become the largest online buyer of used autos from consumers.
“The acquisition of Edmunds will further strengthen the role and reach of both companies,” continued Nash. “Our partnership to date has proven to be an outstanding combination as we’ve developed innovative products, including an online instant appraisal offer on both edmunds.com and carmax.com. We look forward to collaborating on new products and initiatives leveraging Edmunds’ industry-leading content and technology expertise to serve both CarMax and Edmunds’ customers.”
Nash concluded by stating, “We have the technology, data, talent, physical assets and scale to unlock opportunities across the used auto ecosystem. We’re excited about the future as we expect robust top line, bottom line and market share growth for the upcoming year.”
Share Repurchase Activity. We repurchased 0.7 million shares of common stock for $66.3 million pursuant to our share repurchase program during the fourth quarter of fiscal 2021. As of February 28, 2021, we had $1.34 billion remaining available for repurchase under the outstanding authorization.
Fiscal 2022 Capital Spending Plan. We estimate capital expenditures will increase to approximately $350 million in fiscal 2022, up from $164.5 million in fiscal 2021 and $331.9 million in fiscal 2020. The increase in planned capital spending in fiscal 2022 reflects several factors, including continued spending on technology and the opening of 10 new locations.
Carmax (KMX) stock price history over the last 5 years
The image below shows the stock price history of Carmax (KMX) over the last 5 years. And its been a good time for Carmax (KMX) stockholders with the stock increasing by 123.7% over the last 5 years. No investor would say no to those type of returns.
The stock of Carmax (KMX) is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Carmax stock is positive at this point in time.
The stock of Carmax (KMX) is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Carmax stock is positive at this point in time.
Latest stock valuation of Carmax
So what is Carmax stock worth based on their 4th quarter 2021 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for Carmax at $94.10 a stock
We therefore believe the stock of Carmax is overvalued at its current price of $123.31
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $94.10 thus a good entry point into Carmax would be at $84.70 or below.
We expect the stock of Carmax to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued
We therefore believe the stock of Carmax is overvalued at its current price of $123.31
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $94.10 thus a good entry point into Carmax would be at $84.70 or below.
We expect the stock of Carmax to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued
Next earnings release of Carmax
It is expected that Carmax (KMX) will release their 1st quarter 2022 earnings report in early July 2021
Related Topics