CarMax Is About to Report Q4 Earnings. Options Trades Expect a Major Move in KMX Stock

Used-car retailer CarMax (KMX) is scheduled to announce its results for the fourth quarter of Fiscal 2026 before the market opens on Tuesday, April 14. KMX stock has risen 21% year-to-date, driven by optimism about the company’s turnaround efforts and improving demand amid geopolitical tensions and macro uncertainty. Last week, CarMax announced the appointment of two independent directors and reached a settlement with activist investor Starboard.

According to TipRanks’ Options Tool, options traders expect about a 10.53% move in either direction in KMX stock in reaction to Q4 FY26 earnings. This implied move is higher than CarMax stock’s average post-earnings move (in absolute terms) of 5.72% over the past four quarters.

Meanwhile, Wall Street expects CarMax to report EPS (earnings per share) of $0.21 for Q4 FY26, reflecting a 64% year-over-year decline. Meanwhile, revenue is expected to fall 5.2% to $5.69 billion.

Investors will look forward to management’s updates on the company’s turnaround efforts and demand backdrop. Consumers are expected to prefer used cars over new vehicles amid the ongoing macroeconomic uncertainty.

Analysts’ Views Ahead of CarMax’s Q4 Earnings

Ahead of Q4 earnings, Evercore analyst Greg Melich raised his price target for CarMax stock to $45 from $40 and reiterated a Hold rating. He expects Q4 results to meet the Street’s expectations, with used-unit comparable sales down 3.0% compared to FactSet’s estimate of a 3.5% decline. Melich’s EPS estimate of $0.21 reflects better comparable sales, partially offset by a more conservative gross profit per unit (GPU) assumption, as he believes that the company had to “sharpen pricing to stabilize volume trends.”

Melich expects investors to focus on CEO Keith Barr’s turnaround plan, with many of Starboard’s suggestions included. KMX’s turnaround is focused on cutting costs, improving efficiency, and boosting volumes by offering more affordable cars and targeted ads. He believes that with two new independent directors added to the board, “things appear to be heading in the right direction.” That said, Melich remains cautious due to high competition, cyclical challenges, and execution risks.

Additionally, William Blair analyst Sharon Zackfia reiterated a Hold rating on CarMax stock. Zackfia believes that “sharper” pricing and a rise in marketing spend boosted demand. She expects a sequential improvement in used-unit comparable sales trends, with a 2% decline compared to the 9% fall seen in Q3 FY26 and better than the Street’s expectations, driven by consistently improving trends throughout the quarter.

Zackfia expects CarMax to report a 3% decline in Q4 FY26 revenue based on projections for flattish retail average selling prices (ASPs) and a high-single-digit decline in wholesale revenue. She expects Q4 EPS to decline by 64% to $0.21, reflecting below-consensus projections for retail GPU and CarMax Auto Finance (CAF) income. While improving sales trends reflect a “nice inflection point,” Zackfia believes that certain questions remain unanswered regarding CarMax’s ability to recapture historical margins. Consequently, she believes that KMX stock is fairly valued at 19 times her calendar year 2026 earnings estimate.

AI Analyst Is Cautious on KMX Stock

Interestingly, TipRanks’ AI Analyst has a Neutral rating on CarMax stock with a price target of $48, indicating 3% upside potential. The AI Analyst’s rating is based on mixed financial performance—solid cash flow improvement and stable gross margin offset by declining revenue and high leverage. Technicals and valuation are both moderate for KMX, consistent with a stock in partial recovery but without strong momentum in fundamentals.

Is KMX a Good Stock to Buy?

Given the ongoing challenges, Wall Street has a Hold consensus rating on CarMax stock based on six Holds, two Sells, and one Buy recommendation. The average KMX stock price target of $37.15 indicates 20.5% downside risk.