CarMax Expected To Report Record Quarter, Highest Earnings Ever; But, Can It Deliver?

CarMax, Inc KMX is scheduled to announce its first quarter (fiscal 2016) financial results on Friday morning, before the market opens. And, according to Estimize, the company is expected to deliver a record quarter, with earnings hitting a historic high.

In the same quarter last year, the car dealer reported earnings of $0.76 per share on revenue of $3.75 billion. For the current quarter, expectations point towards a year-over-year growth rate of at least 21 percent.

The crowd projects consensus earnings of $0.92 per share on revenue of $4.219 billion. The Street is even more bullish, and models consensus earnings of $0.98 per share on sales of $4.571 billion.

However, it should be noted from the chart above that CarMax has a history of falling short of the Street’s expectations, while sometimes meeting the crowd’s. So, it would be no surprise to see earnings fall somewhere between $0.98 per share and $0.92 per share this quarter.

An Oppenheimer Top Pick

In a recently issued report, Oppenheimer analyst Ari Wald shares the firm’s top stock pick in each of nine market sectors, based on technical analysis and overall score.

Related Link: Oppenheimer's Top Stock Pick In 9 Different Sectors

Among consumer discretionary stocks, Oppenheimer selected CarMax (Buy rated). A recent Benzinga article (linked above) explicates, “The improving economy and low gas prices have left American consumers with a lot of extra spending money, and the Consumer Discretionary sector has been hot as of late. After forming a broad base dating back to 2011, CarMax recently broke out above multi-year resistance in its chart versus the specialty retail segment.”