CarMax: US used car dealer doubles profit

Last Updated: 9. Januar 2024By

If you live in the USA and want to sell your old car, then CarMax is one of your first options. This is because CarMax is one of the largest used car dealers in the USA. Their business concept includes low prices, a wide selection, high-quality vehicles, and customer-friendly service.

Profit more than doubled In the third quarter, the company reported earnings per share of $0.52, up from $0.24 in the previous year. Analysts had expected $0.41. Revenue for the quarter was $6.15 billion, compared to $6.51 billion in the previous year. Analysts had forecasted $6.3 billion.

Continued success despite crisis „Our third quarter results reflect the team’s ongoing efforts that have led to sequential improvements in key components of our business over several quarters, despite ongoing pressures in the used car industry,“ said Chief Executive Bill Nash.

CarMax opens new stores CarMax plans to open four new stores in the current quarter, including two in New York and one each in Los Angeles and Chicago. This trend is evident: the US company is growing primarily in booming metropolises.

Can the stock continue to rise?

Conclusion: In the first year of 2023, the stock has risen by 26%. But a look at the chart also shows that after highs, there are often abrupt profit-taking. What potential does the US auto stock offer you? The analysts have mixed feelings. 10 out of 20 analysts recommend buying, 7 recommend holding, and 4 analysts recommend selling. The average analyst price target of $76 doesn’t offer much potential. The highest analyst price target is $105, downgraded from $135, and offers potential of 75.92%. Based on the earnings estimate for 2024, the auto stock is already highly valued with a P/E ratio of 24. CarMax does not pay a dividend.