Validea's Top Consumer Discretionary Stocks Based On Martin Zweig - 6/12/2025
Written by Emily J. Thompson, Senior Investment Analyst
Source: NASDAQ.COM
Top Rated Consumer Discretionary Stocks: Validea's Growth Investor model highlights several consumer discretionary stocks, including Stride Inc., Ulta Beauty Inc., CarMax Inc., Sturm Ruger & Company Inc., and Thor Industries Inc., all rated at 69% based on their fundamentals and valuations, indicating moderate interest according to Martin Zweig's strategy.
Company Descriptions: Each company specializes in different sectors, such as education technology (Stride), beauty retail (Ulta), used auto sales (CarMax), firearms manufacturing (Sturm Ruger), and recreational vehicles (Thor), with a focus on growth potential and market demand.
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Analyst Views on KMX
Wall Street analysts forecast KMX stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for KMX is 33.60 USD with a low forecast of 24.00 USD and a high forecast of 37.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
0 Buy
10 Hold
3 Sell
Hold
Current: 46.960
Low
24.00
Averages
33.60
High
37.00
Current: 46.960
Low
24.00
Averages
33.60
High
37.00
About KMX
CarMax, Inc. is a retailer of used autos. The Company operates through two segments: CarMax Sales Operations and CarMax Auto Finance (CAF). The CarMax Sales Operations segment consists of all aspects of its auto merchandising and service operations. The CarMax Sales Operations segment sells used vehicles, purchases used vehicles from customers and other sources, sells related products and services, and arranges financing options for customers. The CAF segment consists solely of its own finance operation that provides financing for customers buying retail vehicles from the Company. The CAF segment also services all auto loans, it originates and is responsible for providing billing statements, collecting payments, maintaining contact with delinquent customers, and arranging for the repossession of vehicles securing defaulted loans. It provides customers with a range of other related products and services, including extended protection plan (EPP) products and vehicle repair services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
U.S. Auto Market Faces Wealth Disparity Challenges
- Income Disparity: According to Cox Automotive, the share of new car buyers earning less than $100,000 dropped from 50% in 2020 to 37% last year, while those earning over $200,000 increased from 18% to 29%, indicating a shift towards affluent buyers and resulting in millions of lost sales.
- Sales Trends: New car sales in the U.S. reached 16.3 million in 2025, falling short of the pre-pandemic record of over 17 million, yet still above historical averages; however, rising average prices and insurance costs are forcing many consumers to opt for used vehicles, impacting overall market vitality.
- Affordability Crisis: A study by Plante Moran found that about one-third of the U.S. population cannot afford new vehicles, with only around 110 “affordable” models available for households earning $65,000 or less, compared to over 250 models for those earning up to $105,000, highlighting severe market imbalances.
- High Monthly Payments: CarMax's Edmunds reported that 20% of new car buyers in Q4 2022 committed to monthly payments exceeding $1,000, a record high, prompting Ford's CEO to warn that the automotive industry must be cautious about affordability issues to avoid a decline in consumer demand and future sales.
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U.S. Auto Market Faces Affordability Crisis
- Changing Consumer Income: According to Cox Automotive, the share of new car buyers with incomes below $100,000 dropped from 50% in 2020 to 37%, while those earning over $200,000 increased from 18% to 29%, indicating a market dominated by affluent buyers, which excludes lower-income consumers from new vehicle purchases.
- New Car Sales Trends: U.S. new car sales are projected to reach 16.3 million in 2025, a decline from the record 17 million in 2020, yet still above historical averages; however, reliance on high-priced models may shrink the market and impact overall sales negatively.
- Scarcity of Affordable Models: A study by Plante Moran found that about one-third of the U.S. population cannot afford new vehicles, with only around 110
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