CarMax Inc

CarMax, the nation’s largest used car retailer, is working with Sierra to enhance its inbound call experience using advanced AI voice-enabled agents. Deployed in May, the Sierra agents use conversational questions to quickly answer common inquiries like store hours and vehicle availability, and to route customers to associates more consistently. Since launch, CarMax has seen an increase in call resolution and a decline in unresolved calls, and plans to add appointment management for appraisals and test drives. Shamim Mohammad, CarMax Chief Information and Technology Officer, said the partnership ensures frequent questions are answered on demand, freeing associates to focus on bigger car-shopping decisions. Bret Taylor, Co-Founder and CEO of Sierra, noted the AI eliminates hold times and repetitive transfers while letting associates spend more time helping customers find the right car.

Illinois Tool Works and CarMax are two industrial stocks that could deliver surprising gains. Illinois Tool Works, a diversified manufacturer of products ranging from restaurant dishwashers to automotive parts, has raised its dividend for 63 consecutive years and repurchased nearly 10% of its outstanding shares over the past five years, driving market-beating total returns. Used car retailer CarMax has seen its stock rally more than 40% since the end of last year, including a 19% gain last month, as industry data suggests the cyclical headwinds of low inventory and high prices may be easing. Cox Automotive reports that used car inventories have edged up to 47 days' worth, while the average age of vehicles on U.S. roads stands at 12.8 years and the average new car price is $49,758, potentially forcing consumers back into the used market.

CarMax shares have gained about 9% since its last earnings report, outperforming the S&P 500. The company reported fiscal 2027 first-quarter earnings per share of $1.31, beating the Zacks Consensus Estimate of 94 cents by 39.61%, while quarterly revenues rose 6.2% year over year to $8.01 billion, surpassing the consensus mark of $7.6 billion. Combined retail and wholesale unit sales increased 3.3% to 392,357, driven by a 14% rise in wholesale vehicle sales to $1.43 billion, though total gross profit declined 4.4% to $854.4 million amid lower retail per-unit profitability. Selling, general and administrative expenses fell 3.7% to $635.2 million as the company targets $200 million in SG&A exit-rate savings by the end of fiscal 2027. CarMax Auto Finance's income dipped 1% to $140.2 million, while its financing penetration rate improved 150 basis points to 43.3%.

CarMax shares surged 13% on Thursday, recovering from a 9% drop the previous session, as analysts issued bullish post-earnings notes. Stephens analyst Jeff Lick upgraded the stock to overweight from equal weight and raised his price target to $66 from $43, citing CarMax's ability to remain the top used-car retailer. J.P. Morgan lifted its target by $1 to $38 while maintaining an underweight rating, and Baird raised its target to $55 from $48 with an outperform rating. The moves followed CarMax's first-quarter fiscal 2027 results, which beat top- and bottom-line estimates and included 6% year-over-year revenue growth.

CarMax reported first-quarter fiscal 2027 earnings per share of $1.31, beating the Zacks Consensus Estimate of 94 cents by 39.61 percent. Quarterly revenues rose 6.2 percent year over year to $8.01 billion, surpassing the consensus mark of $7.6 billion. The results were driven by higher retail and wholesale revenues, with combined unit sales up 3.3 percent to 392,357. Selling, general and administrative expenses declined 3.7 percent to $635.2 million, helping offset a 4.4 percent drop in total gross profit to $854.4 million. CarMax Auto Finance income edged down 1 percent to $140.2 million, while its financing penetration rate improved 150 basis points to 43.3 percent.

Several stocks made notable premarket moves on Wednesday. CarMax rose more than 3.5% after reporting first-quarter earnings of $1.31 per share, well above the 95 cents expected by analysts polled by LSEG. AST SpaceMobile jumped 6% following the successful launch of three new satellites to build its cellular broadband network in space, using SpaceX's Falcon 9 rocket. La-Z-Boy surged 16% after retail sales rose 11% in its fiscal fourth quarter and it delivered an earnings beat. Lionsgate Studios fell more than 5% after Netflix denied reports of acquisition interest, reversing a 14% gain on Tuesday. Semiconductor stocks rebounded from a sell-off, with Intel up more than 3%, Advanced Micro Devices up more than 2.5%, and Broadcom and Qualcomm up more than 1.5%. Figma gained 4% after Citi initiated coverage with a buy rating, citing a $25 billion total addressable market. Oracle slipped 1% after calling a Business Insider report inaccurate that said Microsoft ended a $3 billion cloud infrastructure lease deal over security concerns. Jabil fell more than 2% despite an earnings and revenue beat and above-expectations guidance.