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Carmax Inc   (KMX)
    Sector  Retail    Industry Automotive Aftermarket
   Industry Automotive Aftermarket
   Sector  Retail
 

Automotive Aftermarket company endures challenging fiscal period with a commendable display of profitability and growth, despite declining revenue

Carmax Inc*s astute expense management steers them to remarkable per share profitability amidst revenue decline


Published Jan 06 2024 / Modified Jan 06 2024
CSIMarket Team / CSIMarket.com


Greatmats_Garage_Floor_Tile_Diamond_Polypropylene_Flooring_TilesDespite the recent weak revenue for Carmax Inc in the financial period ending November 30, 2023, the company has managed to showcase substantial growth in its earnings per share (EPS) and income per share.
This demonstrates the company's ability to generate strong profitability even in the face of declining revenue.

Income per share grew rapidly by an impressive 116.67% to $0.52 per share, indicating that Carmax Inc has been able to effectively manage its expenses and generate higher profitability on a per share basis.
This is a remarkable feat considering the overall decline in revenue by -5.494% to $6.15 billion year on year.

While the Automotive Aftermarket industry as a whole experienced a decline in revenue and earnings in the third quarter of 2024,
Carmax Inc was able to outperform its peers.
Despite a -30.67% deterioration in earnings from the prior quarter and a -13.081% decline in revenue from $7.07 billion, Carmax Inc still managed to report a bottom-line of $82.003 million, reflecting a 118.21% increase from the previous year.
This showcases the company's resilience and ability to adapt to market challenges.

Another positive indicator for Carmax Inc is the decline in inventories, which is a result of the seasonal nature of the business.
Although inventories have decreased to $3,638.9 million from the previous quarter, there has been a relative increase compared to the same period last year.
This suggests that Carmax Inc is effectively managing its inventory levels to meet customer demand.

Furthermore, the build-up in accounts receivable is a strong signal of rising demand.
Accounts receivable grew to $17,294.3 million, indicating that Carmax Inc is experiencing an increase in sales and customers are paying their bills promptly.
This bodes well for the company's future revenue growth and financial performance.

Looking ahead, Carmax Inc is expected to report its next financial results on April 12, 2024.
This will provide further insights into the company's performance and its ability to sustain its growth trajectory.
Given the company's recent resilience and ability to generate higher profitability despite declining revenue, there is optimism surrounding Carmax Inc's future prospects.

However, it is important to note that Carmax Inc shares have experienced a decline of -4.87% in the past 5 trading days, bringing the year-to-date performance to -4.2%. Despite this recent dip, Carmax Inc shares are still trading 0.7% above its 52-week average on the NYSE.
This indicates that there is still investor confidence in the company's long-term prospects.

In conclusion, Carmax Inc's ability to grow its earnings per share and income per share, despite weak revenue, showcases its strength and resilience in the market.
With a strong bottom-line increase, declining inventories, and a build-up in accounts receivable, there are positive indicators for future growth.
Investors should keep an eye on Carmax Inc's upcoming financial results to gauge its continued success in the industry.



Carmax Inc's Price to Cash Flow ratio

Carmax Inc's Price to Book ratio



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