Benzinga | Mar 31, 2021 10:07AM EDT

CarMax's Earnings: A Preview

On Thursday, April 01, CarMax (NYSE:KMX) will release its latest earnings report. Here is Benzinga's outlook for the company.

Net Income, Earnings, And Earnings Per Share

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Wall Street expects EPS of $1.26 and sales around $5.16 billion. CarMax EPS in the same period a year ago totaled $1.3. Sales were $4.96 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

The Wall Street consensus estimate for earnings would represent a 3.08% decrease for the company. Revenue would be up 3.99% from the same quarter last year. In comparison to analyst estimates in the past, here is how the company's reported EPS stacks up:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate 1.14 1.08 0.04 1.12EPS Actual 1.42 1.79 -0.15 1.30Revenue Estimate 5.00 B 5.21 B 2.71 B 4.67 BRevenue Actual 5.18 B 5.37 B 3.23 B 4.96 B

Stock Performance

For a full 12 months, the return has risen by 167.05%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. CarMax is scheduled to hold the call at 09:00:00 ET and can be accessed here.