Used car hawker CarMax
What analysts say:
- Buy, sell, or waffle? 12 analysts follow CarMax, giving it three buy ratings to nine holds.
- Revenues. On average, analysts expect to see sales rise 14% to $2.2 billion.
- Earnings. Profits are predicted to rise 16% to $0.29 per share.
What management says:
The most recent statement out of CarMax came at the Goldman Sachs 14th Annual Global Retailing Conference earlier this month. We covered the news in detail last week, but the dime tour goes like this: Left alone in the used car superstore space since AutoNation
Big picture, the game here is grabbing market share. While analysts look to Ford
What management does:
Knowing that this is the plan gains significance as we turn our attention to CarMax's margin trends. As you can see below, rolling gross margins haven't improved a whit in half a year, and operating and net margins have basically been stuck in neutral for a year. But if that's the plan, then perhaps it's not such a bad thing.
2/06 |
5/06 |
8/06 |
11/06 |
2/07 |
5/07 |
|
---|---|---|---|---|---|---|
Gross |
14.1% |
14.2% |
14.4% |
14.5% |
14.5% |
14.5% |
Operating |
3.5% |
3.8% |
4.4% |
4.6% |
4.4% |
4.4% |
Net |
2.1% |
2.3% |
2.6% |
2.8% |
2.6% |
2.6% |
One Fool says:
The gents at Motley Fool Inside Value updated us on their thoughts about Inside Value recommendation CarMax. As analyst Michael Olsen put it, the team's bullishness stems from CarMax's information system -- the company's competitive advantage. It allows CarMax quickly to determine demand, recent selling prices, and prospective margins on cars all over the nation. "The obvious and important result is that CarMax sells the right cars -- at the right price -- at any given point in time."