CarMax Inc (KMX)
CarMax is a used vehicle retailer based in the United States. It operates two business segments: CarMax Sales Operations and CarMax Auto Finance.
Stock Price Trends
Stock price trends estimated using linear regression.
Key facts
- The primary trend is increasing.
- The growth rate of the primary trend is 7.68% per annum.
- KMX price at the close of November 20, 2024 was $76.66 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 25.90% per annum.
- KMX price at the close of November 20, 2024 was inside the secondary price channel.
- The direction of the secondary trend is opposite to the direction of the primary trend. This indicates a possible reversal in the direction of the primary trend.
Linear Regression Model
Model equation:
Yi = α + β × Xi + εi
Top border of price channel:
Exp(Yi) = Exp(a + b × Xi + 2 × s)
Bottom border of price channel:
Exp(Yi) = Exp(a + b × Xi – 2 × s)
where:
i - observation number
Yi - natural logarithm of KMX price
Xi - time index, 1 day interval
σ - standard deviation of εi
a - estimator of α
b - estimator of β
s - estimator of σ
Exp() - calculates the exponent of e
Primary Trend
Start date: September 29, 2022
End date: November 20, 2024
a = 3.9894
b = 0.0002
s = 0.0906
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0002) – 1
= 7.68%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0906) – 1
= 43.66%
September 29, 2022 calculations
Top border of price channel:
Exp(Y718)
= Exp(a + b × X718 + 2 × s)
= Exp(a + b × 1,043 + 2 × s)
= Exp(3.9894 + 0.0002 × 1,043 + 2 × 0.0906)
= Exp(4.3819)
= $79.99
Bottom border of price channel:
Exp(Y718)
= Exp(a + b × X718 – 2 × s)
= Exp(a + b × 1,043 – 2 × s)
= Exp(3.9894 + 0.0002 × 1,043 – 2 × 0.0906)
= Exp(4.0196)
= $55.68
November 20, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(3.9894 + 0.0002 × 1,826 + 2 × 0.0906)
= Exp(4.5406)
= $93.74
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(3.9894 + 0.0002 × 1,826 – 2 × 0.0906)
= Exp(4.1783)
= $65.25
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 7.68% per annum.
- KMX price at the close of November 20, 2024 was $76.66 and was inside the primary price channel.
Secondary Trend
Start date: July 11, 2024
End date: November 20, 2024
a = 5.7965
b = -0.0008
s = 0.0395
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0008) – 1
= -25.90%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0395) – 1
= 17.14%
July 11, 2024 calculations
Top border of price channel:
Exp(Y1,164)
= Exp(a + b × X1,164 + 2 × s)
= Exp(a + b × 1,694 + 2 × s)
= Exp(5.7965 + -0.0008 × 1,694 + 2 × 0.0395)
= Exp(4.4846)
= $88.64
Bottom border of price channel:
Exp(Y1,164)
= Exp(a + b × X1,164 – 2 × s)
= Exp(a + b × 1,694 – 2 × s)
= Exp(5.7965 + -0.0008 × 1,694 – 2 × 0.0395)
= Exp(4.3265)
= $75.68
November 20, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(5.7965 + -0.0008 × 1,826 + 2 × 0.0395)
= Exp(4.3762)
= $79.54
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(5.7965 + -0.0008 × 1,826 – 2 × 0.0395)
= Exp(4.2181)
= $67.90
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 25.90% per annum.
- KMX price at the close of November 20, 2024 was inside the secondary price channel.