11:53 AM EST, 12/17/2024 (MT Newswires) -- CarMax ( KMX ) is expected to report a mostly in-line fiscal Q3, with only a slight downside risk in CarMax Auto Finance but continued improvement in key areas like used unit comps and gross profit per unit, Wedbush Securities said in a note Tuesday.

Analysts, including Seth Basham, said that the company will deliver fiscal Q3 used unit comps close to Wedbush's 2.5% estimate and the consensus 3%, with strong performance at the end of the quarter, supported by new digital tools allowing customers to complete transactions across channels. Additionally, CarMax ( KMX ) is expected to maintain retail gross profit per unit in the current pricing environment.

The analysts said they expect CarMax's ( KMX ) unit sales of 124,000 as the continues to use digital tools like MaxOffer to acquire and wholesale more vehicles. Other Gross Profit is projected to be $120 million, up 31% year-over-year, compared to 33% growth in fiscal Q2. This is driven by strong extended service plan revenue and higher profit per unit due to pricing changes. Selling, General, and Administrative Expenses are expected to be in line at $583 million, with changes in comparison, bonuses, and equity compensation offset by reduced occupancy costs and efficiency improvements.

The analysts added that they project fiscal Q3 earnings per share of $0.57, slightly below the consensus of $0.60 but up from $0.50.

Wedbush has an outperform rating and a $95 price target on CarMax ( KMX ). Shares of the company fell past 2% in recent trading activity.

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