FTC Crackdown on Dealer Ads Gives CarMax a Pricing Edge, CEO Says
KMX sits 95% above its 52-week low of $30.26 on elevated volume (3.0× avg).
Summary
CarMax's CEO says the FTC's crackdown on misleading dealer advertising is making its fixed-price, no-fee model more competitive. Since May, dealers have been folding doc fees into advertised prices, making their vehicles look pricier relative to CarMax. The company saw a doubling of 'great deal' labels on Cars.com over the summer. This follows today's Q2 report showing 13% used-unit comp growth and a 5% stock pop. The FTC-driven pricing advantage is a new qualitative tailwind beyond the already-reported numbers.
At the time of this announcement, KMX was trading at $58.91 on NYSE in the Trade & Services sector, with a market capitalization of approximately $8.4B. The 52-week trading range was $30.26 to $65.28. This news item was assessed with positive market sentiment and an importance score of 7 out of 10. Source: Dow Jones Newswires.