Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.

Why CarMax's Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of auto retailer CarMax (NYSE: KMX  ) jumped as much as 13% today on a positive analyst report.

So what: ITG Research said that retail revenue growth is greater than expected and could set the company up to beat expectations. The company's tracking says that retail revenue growth is 16.7% versus an expectation of 13.3%.

Now what: ITG's numbers may turn out to be true but I would rather see strong data from the company before buying on a projection like this. Shares are trading at 16 times forward earnings, so if revenue is growing faster than expected then there could be a nice upside, but I'll wait to hear from management. Shares have lost some of their early gains, and like many analyst-induced pops I don't think today's will last.

Interested in more info on CarMax? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2048259, ~/Articles/ArticleHandler.aspx, 3/26/2015 10:24:54 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...