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Investing.com - Truist Securities raised its price target on CarMax (NYSE:KMX) to $74.00 from $72.00 on Monday, while maintaining a Hold rating on the used car retailer following its first-quarter results. According to InvestingPro data, analyst targets for CarMax range from $51 to $120, with the stock currently trading at a P/E ratio of 19x.
The firm noted CarMax delivered "solid" first-quarter performance with used unit comparable sales of 8.1%, which may have been boosted by consumers purchasing vehicles ahead of anticipated tariffs. The company, with a market capitalization of $9.95 billion, maintains strong liquidity with a current ratio of 2.39, indicating healthy operational flexibility.
Despite the strong quarter, Truist highlighted that CarMax faces "much more difficult comparisons" in the second quarter and second half of the year, with sustainability remaining a key question for the business.
The research firm believes CarMax has likely moved beyond most of the pull-forward demand that benefited recent results and continues to face market share challenges in the used vehicle space.
Truist also pointed to potential higher vehicle prices that could exacerbate affordability pressures for consumers, which may continue to constrain growth for the company.
In other recent news, CarMax reported strong financial results for the first quarter of fiscal year 2026, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $1.38, exceeding the forecasted $1.19, while revenue reached $7.5 billion, slightly above the anticipated $7.54 billion. This marks a 6% increase in revenue from the previous year and a 42% rise in EPS. CarMax's digital and omnichannel sales strategies have significantly contributed to its performance, with 80% of retail unit sales supported by digital capabilities. The company maintained its guidance for the fiscal year, focusing on growing sales and gaining market share. Analysts from Mizuho (NYSE:MFG) have maintained a Neutral rating with an $80 price target, noting the company's strong performance and sustainable expense management. CarMax is also increasing its advertising budget to support its omnichannel strategy, aiming to enhance its digital operations and customer experience.
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