By Kuldip K. Ambastha
On Thursday, September 29, 2022, the stock price of CarMax, Inc. (KMX), a used vehicle retailer, dropped by -24.6% per share. The American company’s latest quarterly performance results disappointed Wall Street, especially from the perspective of earnings per share (EPS). The current landscape of high inflation, higher interest rates (making for more expensive vehicle loans alongside stricter credit underwriting standards), and low consumer confidence has lessened the demand for used vehicles. Both individuals and wholesaling companies, the two key customer segments of CarMax, have lowered their used vehicle purchasing activities. Since the used vehicle market is often a leading indicator for where the new vehicle market is heading, in the near future we all may see less demand for new vehicles as well.
Keywords – CarMax, Inc., CarMax, KMX, used, new, vehicle, retailer, retail, earnings per share, EPS, Wall Street, inflation, interest rates, confidence, demand, purchasing, individual, wholesale, customer, consumer, client.
Disclosure – The principals and clients of Ambastha Financial LLC have no positions in KMX.
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