June 26, 2024

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CarMax stock soars on earnings beat but online rival Carvana sinks

CarMax stock soars on earnings beat but online rival Carvana sinks

carmax (KMXEarnings views for the fiscal first quarter were crushed Friday on the back of measures to control costs. CarMax shares are up, but they’re competitive online carvana (CVNA) She fell.


CarMax earnings

The leading used auto retailer reported earnings of $1.44 per share for $7.687 billion for the quarter ended May 31st. And on a year-over-year basis, CarMax’s earnings are down about 8% and revenue is down 17%.

Analysts braced for CarMax earnings of 79 cents per share and revenue of $7.495 billion, FactSet shows.

CarMax used retail unit sales are down 9.6% from a year ago. Wholesale units fell 13.6% year over year. Comparable store used unit sales were down 11.4% from a year ago.

CarMax said in an earnings release that SG&A (selling, general and administrative) costs fell 14.8%, or $96.9 million, to $559.8 million, driven by proceeds from legal settlement and active cost management.

“Our intentional actions are driving improving trends in the business, despite a challenging macro environment,” CarMax CEO Bill Nash said in the release.

CarMax stock, CVNA stock

CarMax shares jumped 10% to 86.21 in the stock market today. KMX shares topped the 73.57 cup handle buy point in May and are quite a stretch.

Upstart competitor Carvana fell 16.1 percent on Friday. CVNA stock is up about 350% year-to-date amid an improving financial outlook.

On Wednesday, and Wall Street Journal I reported on a potential takeover attempt at the beleaguered auto, home and renters insurer root (root), at a huge premium. But the report said the bidder, Embedded Insurance, was unsuccessful in negotiating a deal.

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Carvana, an online used car sales company, invested in Root in 2021. The companies have partnered to provide auto insurance to Carvana customers.

ROOT stock is down 14.8% on Friday after surging on Wednesday.

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