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 decreasing.
- The decline rate of the primary trend is 31.04% per annum.
- KMX price at the close of July 25, 2024 was $81.55 and was higher than the top border of the primary price channel by $27.55 (51.03%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 8.13% per annum.
- KMX price at the close of July 25, 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: January 19, 2021
End date: June 1, 2023
a = 5.5805
b = -0.0010
s = 0.1338
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0010) – 1
= -31.04%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1338) – 1
= 70.79%
January 19, 2021 calculations
Top border of price channel:
Exp(Y373)
= Exp(a + b × X373 + 2 × s)
= Exp(a + b × 543 + 2 × s)
= Exp(5.5805 + -0.0010 × 543 + 2 × 0.1338)
= Exp(5.2952)
= $199.38
Bottom border of price channel:
Exp(Y373)
= Exp(a + b × X373 – 2 × s)
= Exp(a + b × 543 – 2 × s)
= Exp(5.5805 + -0.0010 × 543 – 2 × 0.1338)
= Exp(4.7599)
= $116.74
June 1, 2023 calculations
Top border of price channel:
Exp(Y969)
= Exp(a + b × X969 + 2 × s)
= Exp(a + b × 1,406 + 2 × s)
= Exp(5.5805 + -0.0010 × 1,406 + 2 × 0.1338)
= Exp(4.4166)
= $82.81
Bottom border of price channel:
Exp(Y969)
= Exp(a + b × X969 – 2 × s)
= Exp(a + b × 1,406 – 2 × s)
= Exp(5.5805 + -0.0010 × 1,406 – 2 × 0.1338)
= Exp(3.8813)
= $48.49
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 31.04% per annum.
- KMX price at the close of July 25, 2024 was $81.55 and was higher than the top border of the primary price channel by $27.55 (51.03%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: September 29, 2022
End date: July 25, 2024
a = 3.9490
b = 0.0002
s = 0.0957
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0002) – 1
= 8.13%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0957) – 1
= 46.62%
September 29, 2022 calculations
Top border of price channel:
Exp(Y801)
= Exp(a + b × X801 + 2 × s)
= Exp(a + b × 1,161 + 2 × s)
= Exp(3.9490 + 0.0002 × 1,161 + 2 × 0.0957)
= Exp(4.3888)
= $80.55
Bottom border of price channel:
Exp(Y801)
= Exp(a + b × X801 – 2 × s)
= Exp(a + b × 1,161 – 2 × s)
= Exp(3.9490 + 0.0002 × 1,161 – 2 × 0.0957)
= Exp(4.0061)
= $54.93
July 25, 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(3.9490 + 0.0002 × 1,826 + 2 × 0.0957)
= Exp(4.5312)
= $92.87
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(3.9490 + 0.0002 × 1,826 – 2 × 0.0957)
= Exp(4.1485)
= $63.34
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 8.13% per annum.
- KMX price at the close of July 25, 2024 was inside the secondary price channel.