Benzinga - by Benzinga Insights, Benzinga Staff Writer.
Diane Cafritz, EVP at CarMax (NYSE:KMX), reported a large exercise of company stock options on April 25, according to a new SEC filing.
What Happened: The latest Form 4 filing on Thursday with the U.S. Securities and Exchange Commission uncovered Cafritz, EVP at CarMax, exercising stock options for 15,356 shares of KMX. The total transaction was valued at $101,349.
The Friday morning update indicates CarMax shares up by 0.61%, currently priced at $69.64. At this value, Cafritz's 15,356 shares are worth $101,349.
All You Need to Know About CarMax CarMax sells, finances, and services used and new cars through a chain of around 250 used retail stores. It was formed in 1993 as a unit of Circuit City and spun off into an independent company in late 2002. Used-vehicle sales typically account for about 83% of revenue (79% in fiscal 2024 due to the chip shortage) and wholesale about 13% (19% in fiscal 2024), with the remaining portion composed of extended service plans and repair. In fiscal 2024, the company retailed and wholesaled 765,572, and 546,331 used vehicles, respectively. CarMax is the largest used-vehicle retailer in the US but still estimates that it had only about 3.7% US market share of vehicles 0-10 years old in 2023. It seeks over 5% share a few years from now. CarMax is based in Richmond, Virginia.
Understanding the Numbers: CarMax's Finances Revenue Growth: CarMax's revenue growth over a period of 3 months has faced challenges. As of 29 February, 2024, the company experienced a revenue decline of approximately -1.68%. This indicates a decrease in the company's top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Consumer Discretionary sector.
Profitability Metrics:
- Gross Margin: The company issues a cost efficiency warning with a low gross margin of 10.42%, indicating potential difficulties in maintaining profitability compared to its peers.
- Earnings per Share (EPS): CarMax's EPS is below the industry average. The company faced challenges with a current EPS of 0.32. This suggests a potential decline in earnings.
Analyzing Market Valuation:
- Price to Earnings (P/E) Ratio: The current P/E ratio of 22.92 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.
- Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 0.41, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio of 17.79, the company's market valuation exceeds industry averages.
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Unmasking the Significance of Insider Transactions Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.
In the context of legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as outlined by Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are obligated to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.
Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.
Despite insider sells not always signaling a bearish sentiment, they can be driven by various factors.
A Closer Look at Important Transaction Codes Examining transactions, investors often concentrate on those unfolding in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of CarMax's Insider Trades.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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