Used-car retailer CarMax (KMX) has agreed to appoint William Cobb and Jim Kessler as new directors to its board at the 2026 annual shareholder meeting. The company added that following constructive discussions and these two board additions, activist investor Starboard has agreed to withdraw its director nominations.
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CarMax, Starboard Reach Settlement
It is worth noting that Cobb was one of the nominees considered by Starboard earlier. The activist investor had also nominated its CEO and chief investment officer, Jeffrey Smith, to KMX’s board.
Starboard had made these two director nominations and urged CarMax’s new CEO Keith Barr to revamp the company’s pricing framework. It also pushed for streamlining KMX’s digital processes and reducing costs.
Last month, Starboard disclosed a roughly $350 million stake in CarMax. On Thursday, the company said that it had invested in CarMax as it believes in its superior value proposition. “We are confident that the refreshed Board, in conjunction with Keith as CarMax’s new CEO, can drive substantial value creation,” said the activist investor.
CarMax stock has declined more than 43% over the past year due to lower demand amid high interest rates and intense competition from rivals Carvana (CVNA) and AutoNation (AN). However, KMX stock has risen more than 17% year-to-date amid activist investor push and an improving market backdrop due to rising oil prices.
Is KMX a Good Stock to Buy?
Currently, Wall Street has a Hold consensus rating on CarMax stock based on six Holds, two Sells, and one Buy. The average KMX stock price target of $37.15 indicates 18% downside risk.
