Shares of used car retailer Carmax (NYSE:KMX) slipped in today’s trading as investors await its Q1 earnings results on June 21 before the market opens. Analysts are expecting earnings per share to come in at $0.95 on revenue of $7.093 billion. This represents a decline from the $1.44 per share seen in the year-ago period, according to TipRanks’ data.
KMX has not enjoyed a good track record lately when it comes to beating estimates. Indeed, it only beat EPS forecasts four times during the past eight quarters, as demonstrated in the image below.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting a 10.64% move in either direction.
Is KMX Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on KMX stock based on six Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 9% decline in its share price over the past year, the average KMX price target of $80.30 per share implies 12.53% upside potential. However, Insiders see things differently.
When looking at insider activity, there seems to be a lot of selling. In fact, insiders have sold $1.1 million worth of shares in the past three months. As a result, confidence from within appears to be low, as the Insider Confidence Signal for RCH stock is negative and is below the sector average, as shown in the picture below:
