CarMax Inc (NYSE:KMX) Earnings Preview and Technicals
CarMax Inc. is set to release first quarter earnings on Tuesday morning before the market opens, with analysts estimating earnings per share to come in at 92 cents with revenues at $4.2 billion. After topping last quarter's estimates, investors are looking for that momentum to continue.
"KMX stock has declined 7.13% so far in 2016, compared with a 1.33% rise in the S&P 500 index. Over the past twelve months, the shares have declined 31.21%, while the S&P 500 index has declined 1.39%. KMX stock has a consensus hold rating and an average analyst 12-month price target of $60.50, implying a rise of 20% from current levels."
Looking at the daily chart, you will see that shares are starting to form an ascending wedge, with the lower range at the $48 level and the upper range sitting at about $52.90ish, right where the 200-day moving average is as well, as of the time of this writing.
We should see those levels act as support/resistance with some further support at $50 and more resistance at $52. Shares have been gaining today ahead of their earnings, with current highs at $51.84 after closing Friday at $50.12, equaling a 3.4% increase in value.
Shares have been under some pressure after hitting highs back in March at $75.40, and started a new downtrend that pushed shares well below their 200-day moving average before finding buyers at the $42, where they were able to hold their ground and make a push back up.
Shares tried regaining the 200-day moving average multiple times recently but were not able to reclaim that crucial level. We’ll need some solid volume and a strong catalyst to get shares back above and to hold that level. Currently analysts have an average price target of $58.21.
KMX Profile
CarMax Inc., through its subsidiaries, operates as a retailer of used vehicles in the United States. The company operates in two segments, CarMax Sales Operations and CarMax Auto Finance. It offers customers a range of makes and models of used vehicles, including domestic and imported vehicles; sells vehicles that do not meet its retail standards to licensed dealers through on-site wholesale auctions; and provides extended protection plans to customers at the time of sale.
The company also offers reconditioning and vehicle repair services; and provides financing alternatives for retail customers across a range of credit spectrum through its CarMax Auto Finance and arrangements with other financial institutions. In addition, it sells new vehicles under franchise agreements. As of February 29, 2016, the company operated 158 used car stores in 78 metropolitan markets. The company was founded in 1993 and is based in Richmond, Virginia.