CarMax (KMX.US) stock is dropping more than 11% today after the Virginia-based used auto retailer posted mixed quarterly results. Company earned $1.72 per share, while analysts' expected earnings of $1.90 per share. On the other hand, revenue beat Wall Street projections. CarMax reported total revenues of $7.99 billion resulting in a 49% jump compared to the same period a year ago and well above market expectations of $6.91 billion. However comparable pre-owned car sales increased only 6.2%, below market expectations of 7.3% increase.
Used car prices in the US have risen this year after customers initially put off their purchases in 2020 amid the outbreak of the pandemic. The prices of new cars soared due to the chip shortages, which in turn resulted in an increased demand for used cars, prices of which were more affordable for ordinary citizens. However, some analysts now believe that demand has already been largely met because people who have had to buy a car have likely done so in recent months. Other customers probably prefer to wait for better offers to appear.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app
CarMax (KMX.US) stock launched today's session with a massive bearish price gap and broke below the 50 SMA (red line). Currently the price is testing an upward trendline. Should a break lower occur, then downward correction may deepen towards support at $121.75 which is marked with the lower limit of the 1:1 structure, 200 SMA (red line) and 23.6% Fibonacci retracement of the upward wave launched in March 2020. On the other hand, if buyers manage to halt declines here, then another upward impulse towards all-time high at $148.00 may be launched. Source: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
