CarMax (KMX) focuses on penetrating new markets through store openings. The company has kept its inventories closely aligned with sales trends, which has allowed it to optimize gross profit per unit besides offering great value to customers. These have helped the company to maintain a favorable position among its peer group.
CarMax has reported profit in the second quarter, reflecting a significant improvement from the Zacks Consensus Estimate. It has experienced a significant rebound in CarMax Auto Finance income to $72 million in the quarter versus a loss of $7 million in the prior year quarter.
These lead us to upgrade the stock to an Outperform recommendation with a target price of $25.Zacks Investment Research
