CarMax (KMX.US) stock erased early gains and fell nearly 5% despite the fact that the auto retailer posted strong quarterly figures. The company recorded net income of $269.4 million, or $1.63 a share, for the quarter, up from $235.3 million, or $1.42 a share, in the year-earlier period. Revenue increased to a record $8.528 billion from $5.185 billion a year ago. Analysts' expected earnings of $1.45 and revenue of $7.378 billion. Retail vehicle sales were up 16.9% to 227,424 units, the company said, while Wholesale surged 48.5% to 187,630 units.
Used car prices have been one of main reasons behind recent inflation surge, according to data from the Commerce Department, with its measure of collective prices rising 39.8% from March 2020 to October 2021 as major carmakers faced production problems due to pandemic restrictions and supply chain disruptions especially regarding parts and semiconductors. The shortage of new cars has pushed up the prices of new and used cars. According to the car information website Edmunds, in October, the average price of a used car reached a record high of US$27,000, however the demand and value of used cars may be cooling as new car production and inventory began to slowly rise after experiencing a decline for most of this year.
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CarMax (KMX.US) stock launched today's session sharply higher however buyers failed to uphold momentum and price pulled back towards major support at $128.00 which is marked with lower limit of the 1:1 structure, 23.6% Fibonacci retracement of the bullish wave launched back in March 2020 and upward trendline. Source: xStation5
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