The 10-second takeaway
For the quarter ended May 31 (Q1), CarMax beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. GAAP earnings per share expanded significantly.
Gross margins shrank, operating margins increased, net margins expanded.
CarMax notched revenue of $3.31 billion. The 13 analysts polled by S&P Capital IQ hoped for revenue of $3.18 billion on the same basis. GAAP reported sales were 19% higher than the prior-year quarter's $2.85 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.64. The 15 earnings estimates compiled by S&P Capital IQ predicted $0.59 per share. GAAP EPS of $0.64 for Q1 were 23% higher than the prior-year quarter's $0.52 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 15.7%, 30 basis points worse than the prior-year quarter. Operating margin was 7.2%, 10 basis points better than the prior-year quarter. Net margin was 4.3%, 10 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $3.10 billion. On the bottom line, the average EPS estimate is $0.55.
Next year's average estimate for revenue is $12.36 billion. The average EPS estimate is $2.17.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 935 members out of 1,028 rating the stock outperform, and 93 members rating it underperform. Among 344 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 333 give CarMax a green thumbs-up, and 11 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on CarMax is outperform, with an average price target of $46.75.
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