We undertook the unenviable task of reading the proxy for every company under coverage (and one we don’t cover: TSLA).
Search Coverage List, Models & Reports
Search Results1-10 out of 94
Using Return on Invested Capital as a lens, we take a look at which companies and sub-industries capture the highest returns within the automotive value chain. We calculate ROIC across 27 companies within industries including dealers, OEMs, parts suppliers, aftermarket retailers, and service providers.
Earlier today (4/18/2018), KMX held an analyst day at its store and reconditioning center in Murrieta, California. The majority of the C-suite (CEO, CFO, CMO, SVP Store Ops and SVP Strategy) were in attendance for tours of the reconditioning center, Wholesale lanes as well as for Q&A. The event was not webcast, and shares were +49bps versus S&P 500 +107bps.
KMX reported 4Q 2017 before the open. Used unit comps of ‑8.0% were below Consensus of -2.8% but met our -8.5%. Adj. EPS of $0.85 missed Consensus of $0.87 but beat our $0.83. See our first take on print. Shares are up +4% after starting off -8% in the AM. Incrementally, we think KMX handled the call and messaging of expenses well, which was enough for bulls to step in and wait for a widening used to new spread.
KMX reported 4Q 2017 before the open (04/04/18). Used unit comps of ‑8.0% were below Consensus of -2.8% but met our -8.5%. EPS of $0.85 missed Consensus of $0.87 but beat our $0.83. There was some added noise around one-time bonuses and DTA revaluation. We adjusted EPS for DTA revaluation but not one-time bonus ($8M), which we originally estimated at $10 - $15M in Q1 (not Q4). The adjusted effective tax rate of 26.3% came in below our 29.5% and Consensus of 33.5%.
The current quarter epitomizes KMX’s high volatility with comps inflecting from a +8% in Q4 16 to an estimated -8% in Q4 17 (Exhibit 3). Call volume has asymmetrically skewed positively with investors looking at buying the dip, while some of the biggest bears we speak to have even moved to the sidelines or revisited as a long. However, investors are universally at a loss for why comps have slowed. We take a look and propose 17 possible explanations for the weakness.
Most of you cover 50 – 200 stocks and therefore don’t have the liberty of being as into the weeds on every name – that’s our job. To help you do yours, we have created a comprehensive, but chart-heavy, guide to our coverage that is meant to have shelf life and that can be referred back to when you are ready to dig more into our coverage.
The tax overhaul is adding a lot of complexity to fundamentals as investors and companies we speak with struggle to digest consensus expectations and current valuation metrics. We sifted through both Factset and Bloomberg estimates to calculate a bottoms-up consensus of ONLY analysts that have revised estimates on tax reform.
In our first tax reform note we studied numerous angles on tax reform. As a continuation, we are studying additional angles and also adjusting numbers and price targets (Exhibit 1). While we remain concerned of the long-term risk/reward of tax reform, near-term we expect consensus EPS revisions to occur as the rewards are easier to forecast than the risks.
KMX reported 3Q 2017 before the open (12/21/2017). Used unit comps of 2.7% (0% ex-hurricane) were below Consensus of 4.7% and our 3.0% setting up tough compares. EPS of $0.81 ($0.05 tax benefit) met Consensus of $0.81 but beat our $0.73 as KMX improved wholesale and CAF margins partially offset by a weaker comp and buy back. Shares were down -3.5%.
- 1 of 10
- next →