CarMax Stock Crumbles After Earnings Miss

The stock has been struggling to rally from its recent lows

Deputy Editor

Apr 12, 2022 at 10:33 AM

CarMax Inc (KMX) stock is experiencing a negative post-earnings reaction after the company's mixed fiscal fourth-quarter results. The used vehicle name reported earnings of 98 cents per share, which is lower than the estimated $1.25 per share, on better-than-expected revenue of $7.69 billion. Plus, the board approved a $2 billion expansion of the company's share repurchase program.

CarMax stock is down 5% to trade at $98.05. The stock has been struggling to rebound from its April 7, 15-month low of $94.35, with pressure at the $105 level. KMX is down 25.1% year-to-date, with pressure forming at the 40-day moving average.

Options traders are swarming the security today, with options volume running at 17 times the intraday average, and pacing for the top percentile of its annual range. So far, 15,000 calls and 12,000 puts have crossed the tape. The May 120 call is the most popular, followed by the April 110 call, with positions being sold to open at the former.

Meanwhile, short interest represents 6.8% of the stock's available float. At KMX's average pace of trading, it would take over seven days to buy back these bearish bets.

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