Carmax Inc (KMX)

CarMax Inc (KMX) stock fell by 9.23% due to a disappointing earnings report and a delay in achieving a sales target. In addition, challenges in used car market also contributed to the stock's decline.

• Earnings Report: CarMax reported disappointing results in its fourth-quarter earnings report. The company's revenue fell by 1.7% to $5.63 billion, missing estimates of $5.79 billion. Retail unit sales increased by 1.3%, while comparable store unit sales saw a slight increase of 0.1%. However, wholesale units, which constitute a minority of the business, decreased by 4%. CarMax's gross profit per retail used unit was $2,251, down 1% from the previous year. Higher sales, general, and administrative expenses contributed to a modest rise, while earnings per share fell from $0.44 to $0.32, well below expectations of $0.49.
• Challenges in the Used Car Market: The market for used cars has been challenging, with high interest rates leading to significantly higher monthly payments for buyers. Additionally, prices have decreased from their peak during the pandemic, following chip shortages and a decrease in pandemic-driven demand.

Shares of CarMax Inc (KMX) dropped by 5.56% from $67.93 to $64.15 in the trading on Thursday, Novemeber 16, 2023. The reason why KMX is down today is due to analyst' lower target price. Analysts lowered the average 12-month price target from $85.86 to $82.17, reflecting a 4.3% decrease. This downgrade in the price target negatively impacted investor sentiment and contributed to the stock's decline.

Shares of the used car superstore chain CarMax (KMX) tumbled 13.40% after the company reported a narrow miss on fiscal Q2 2024 earnings.

https://www.fool.com/investing/2023/09/28/why-carmax-stock-crashed-98-today/