CarMax Stock Races Higher After Earnings Beat

The firm cited strong online sales for its earnings and revenue beats

Digital Content Manager
Sep 24, 2019 at 9:44 AM
facebook twitter linkedin

The shares of auto retailer CarMax, Inc (NYSE:KMX) are popping today, after the firm reported second-quarter earnings of $1.40 per share on $5.2 billion in revenue -- both of which topped analysts' expectations. The company cited a boost from online sales for its earnings beat. KMX stock is 3.9% higher at $90.30 at last check, right below its late-July record high of $91.99. 

The used car seller lost 5.1% in August, following its July spike -- snapping its six-month win streak and hitting two-month lows just below the $80 region. However, the equity bounced sharply from this round number, and is now looking at an 8.4% month-to-date gain for September. 

While the brokerage bunch is mostly bullish, some upgrades could be on the horizon, with three of the 12 analysts in coverage still giving KMX stock a "hold" rating. Plus, the consensus 12-month target price of $97.75 is at a slim 8.3% premium to current levels. 

Short sellers have been coming in hot, with these bearish bets up 12.6% in the last two reporting periods -- which likely amplified CarMax's retreat from its all-time peak. The 21.38 million shares now sold short represent almost 13% of the stock's available float, and would take over 13 days to cover, at KMX's average pace of trading. This could set up a short-squeeze situation, should some of these bears begin to retreat. 


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners