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CarMax
(NYSE:KMX)
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Rating:58Neutral
Price Target:
$62.00
▼(-1.02% Downside)
Action:Reiterated
Date:09/30/26
Overall score reflects mixed fundamentals: improving revenue and cash flow are offset by thin margins, inconsistent operating profitability, and high leverage. A strongly positive earnings call (strong sales/EPS growth and cost-savings progress) lifts the outlook, while technicals are neutral and valuation (P/E ~28.6 with no dividend yield provided) is a modest drag.
Positive Factors
Strong used-vehicle sales growth
Strong comparable sales and unit growth indicate improving customer demand and effective execution in CarMax’s core used-vehicle retail model. Outperformance versus the described industry trend can support greater inventory throughput, operating leverage, and sustained revenue expansion over the next several quarters.
Negative Factors
Thin and inconsistent operating profitability
Very low net profitability leaves limited room to absorb weaker pricing, higher operating costs, or changes in demand. Repeatedly negative annual EBIT also suggests that recent improvement has not yet established a durable earnings base, limiting operating resilience over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong used-vehicle sales growth
Strong comparable sales and unit growth indicate improving customer demand and effective execution in CarMax’s core used-vehicle retail model. Outperformance versus the described industry trend can support greater inventory throughput, operating leverage, and sustained revenue expansion over the next several quarters.
Read all positive factors
CarMax Key Performance Indicators (KPIs)
Any
Gross Profit by Segment
Highlights profitability across different segments, providing insight into which areas contribute most to the bottom line and where cost efficiencies or pricing power are strongest.
Highlights profitability across different segments, providing insight into which areas contribute most to the bottom line and where cost efficiencies or pricing power are strongest.
Data provided by:
The Fly
The FlyCarMax (KMX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.20B
Dividend YieldN/A
Average Volume (3M)2.89M
Price to Earnings (P/E)23.8
Beta (1Y)0.64
Revenue Growth4.09%
EPS Growth-40.01%
CountryUS
Employees27,796
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)2.13
Shares Outstanding141,942,810
10 Day Avg. Volume4,557,939
30 Day Avg. Volume2,894,913
Financial Highlights & Ratios
PEG Ratio-0.54
Price to Book (P/B)1.08
Price to Sales (P/S)0.25
P/FCF Ratio5.11
Enterprise Value/Market Cap3.62
Enterprise Value/Revenue0.94
Enterprise Value/Gross Profit9.36
Enterprise Value/Ebitda25.04
Forecast
1Y Price Target
$62.44Price Target Upside-0.31% Downside
Rating ConsensusHold
Number of Analyst Covering13
EPS Forecast (FY)3.16
Revenue Forecast (FY)$28.59B
CarMax Business Overview & Revenue Model
Company Description
CarMax, Inc., together with its associated entities, functions as a prominent purveyor of previously owned automobiles across the United States. Its business operations are strategically structured into two principal divisions: CarMax Sales Operat...
How the Company Makes Money
CarMax makes money through multiple, complementary revenue streams tied to used-vehicle retailing and related services. (1) Retail used vehicle sales: The largest source of revenue is the sale of used cars to consumers. CarMax buys vehicles via cu...
CarMax Earnings Call Summary
Earnings Call Date:Sep 29, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Dec 17, 2026
Earnings Call Sentiment Positive
The call was strongly positive, with substantial year-over-year growth in sales, comparable units, EPS, gross profit, CAF income, EPP margins, and SG&A productivity. Management also highlighted improved pricing competitiveness, resilient consumers, AI and digital initiatives, strategy execution, and the planned resumption of share repurchases. The main negatives were lower gross profit per unit, declining CAF penetration, an expectation for slightly lower FY2027 CAF income, upcoming pension and severance charges, higher transportation costs, and affordability pressure from elevated interest rates. Highlights significantly outweighed the lowlights.Positive Updates
Strong Sales Growth
Second-quarter total sales were $7.9 billion, up 19% year-over-year. Approximately 388,000 vehicles were sold across retail and wholesale channels, up 15%. Used unit comps increased 13%, total used unit sales grew 14%, and wholesale unit sales increased 16%.
Negative Updates
Used Retail Gross Profit Per Unit Declined
Used retail profit per unit was $2,105, down $111 year-over-year. Management expects FY2027 full-year retail margins to be down less than $200 per unit versus FY2026.
Read all updates
Q2-2027 Updates
Positive
Negative
Strong Sales Growth
Second-quarter total sales were $7.9 billion, up 19% year-over-year. Approximately 388,000 vehicles were sold across retail and wholesale channels, up 15%. Used unit comps increased 13%, total used unit sales grew 14%, and wholesale unit sales increased 16%.
Read all positive updates
Company Guidance
CarMax expects FY '27 full year retail margins will be down less than the $200 per unit as compared to FY '26, with GPUs expected to be down less than $200 year-over-year for the year and to decrease in the third quarter and in the fourth quarter as well, both year-over-year; it remains on track to deliver $200 million in identified savings as an FY '27 exit rate target, drive approximately $35 per unit in incremental EPP margin for the full fiscal year, and record approximately $50 million in total settlement-related noncash, nonrecurring charges, with relatively similar amounts expected to be recognized in the third and fourth quarters; CAF's FY '27 income is anticipated to be slightly lower than FY '26 while planning to originate nearly $1 billion in Tier 2 by year-end, and share repurchases are expected to restart in the third quarter at a modest pace below the average quarterly pace prior to the pause.CarMax Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
41
Neutral
Cash Flow
62
Positive
| Breakdown | TTM | Feb 2026 | Feb 2025 | Feb 2024 | Feb 2023 | Feb 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 27.63B | 25.88B | 26.35B | 26.54B | 29.68B | 31.90B |
| Gross Profit | 2.78B | 2.81B | 2.90B | 2.71B | 2.80B | 3.29B |
| EBITDA | 1.04B | 1.61B | 1.84B | 1.67B | 1.33B | 2.09B |
| Net Income | 292.44M | 247.29M | 500.56M | 479.20M | 484.76M | 1.15B |
Balance Sheet | ||||||
| Total Assets | 26.07B | 26.37B | 27.40B | 27.20B | 26.18B | 26.34B |
| Cash, Cash Equivalents and Short-Term Investments | 170.53M | 122.83M | 246.96M | 574.14M | 314.76M | 102.72M |
| Total Debt | 17.87B | 17.78B | 19.43B | 19.31B | 18.93B | 19.27B |
| Total Liabilities | 19.76B | 20.48B | 21.16B | 21.12B | 20.57B | 21.10B |
| Stockholders Equity | 6.30B | 5.89B | 6.24B | 6.07B | 5.61B | 5.24B |
Cash Flow | ||||||
| Free Cash Flow | 1.15B | 1.24B | 156.50M | -6.69M | 860.62M | -2.86B |
| Operating Cash Flow | 1.60B | 1.78B | 624.44M | 458.62M | 1.28B | -2.55B |
| Investing Cash Flow | -437.84M | -540.04M | -461.00M | -467.00M | -425.77M | -523.75M |
| Financing Cash Flow | -1.55B | -1.34B | -453.54M | 307.79M | -710.18M | 3.10B |
CarMax Technical Analysis
Negative
62.64
Price Trends
58.69
Negative
54.95
Negative
48.61
Positive
Market Momentum
-1.84
Positive
30.79
Neutral
5.48
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KMX, the sentiment is Negative. The current price of 62.64 is above the 20-day moving average (MA) of 56.11, above the 50-day MA of 58.69, and above the 200-day MA of 48.61, indicating a neutral trend. The MACD of -1.84 indicates Positive momentum. The RSI at 30.79 is Neutral, neither overbought nor oversold. The STOCH value of 5.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KMX.
CarMax Risk Analysis
CarMax disclosed 27 risk factors in its most recent earnings report. CarMax reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CarMax Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $65.49B | 20.57 | 46.57% | ― | 53.98% | 159.43% | |
66 Neutral | $6.30B | 9.45 | 10.91% | 0.83% | 1.97% | -10.60% | |
65 Neutral | $2.94B | 6.12 | 13.04% | ― | 4.12% | -2.47% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $7.20B | 23.80 | 4.80% | ― | 4.09% | -40.01% | |
56 Neutral | $5.14B | 7.06 | 33.18% | ― | -0.06% | 35.87% | |
53 Neutral | $1.92B | 9.53 | 20.45% | 2.60% | 5.25% | 37.36% |
* Consumer Cyclical Sector Average
KMX
CarMax
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CarMax Corporate Events
Business Operations and StrategyExecutive/Board Changes
CarMax announces leadership transition and consulting arrangement
Neutral
Jul 31, 2026
On July 31, 2026, CarMax announced that Executive Vice President and Chief Innovation and People Officer Diane Cafritz will leave the company effective December 31, 2026, with changes to her severance terms. Her payout will be based on one-and-a-h...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.