Shares of CarMax, Inc (NYSE: KMX), the nation's largest used car company, are up over 5% in today’s trading session after the reported crushed analysts’ estimates for Q1 results.

The company reported earnings of $2.63 per share to smash the $1.63 expected from market analysts. Business sales came in at $7.7 billion to again easily exceed the $6.18 billion expected from the Street.

“We delivered exceptional results in the first quarter thanks to excellent execution by our team in a high demand environment,” said Bill Nash, president and chief executive officer.

“Our strong performance, which included record net revenues and profitability, reflects the strength of our omni-channel experience and diversified business model across retail, wholesale and CAF.”

KMX saw its retail used unit record sales 100% higher compared to a year ago. The recent inflation report noted a strong increase in prices of used cars. According to the Labor Department, used-car prices soared almost 30% in 12 months to May 2021.

KMX said it used the option to purchase 1 million shares of its common stock for $124.5 million in Q1, with $1.21 billion remaining available for repurchase.

Morgan Stanley analyst Adam Jonas noted a “big beat” delivered by the Overweight-rated KMX. The analyst left the $165.00 per share price target unchanged.

“While CVNA remains our preferred used car name, we think KMX has the network capability to be a strong challenger to CVNA over the long run and can deliver strong returns to investors,” Jonas said in a note sent to clients.

“We would encourage investors to prepare for a normalization of Manheim (GPUs) which we expect may curtail sentiment across the used car group and the broader auto sector.”