Carvana (CVNA) and CarMax (KMX), two of the most popular American used car retailers, have both now released their latest quarterly results. Both currently carry some downside risks, but analysts deem Carvana a Strong Buy and CarMax a Hold.
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How Do the Retailers’ Earnings Compare?
In its Q3 2026 earnings results released on December 18, Virginia-based CarMax saw its earnings per share fall by 47% from a year ago to $0.43. This is even as the retailer’s total sales fell by 13% year-over-year (YoY) to $5.64 billion, adding to the significant fall in retail volumes seen in the previous quarter.
On the contrary, Arizona-based Carvana reported a 55% YoY growth in its sales in its Q3 2025 earnings report released in late October. This came with a 61% rise in its GAAP earnings per share, which reached $1.03.
Going forward, CarMax plans to lower its profit margin to boost its retail car sales, while also spending more on marketing activities. By comparison, Carvana’s investors at the time of the retailer’s earnings release appeared concerned by the 40 basis point decline in Carvana’s adjusted earnings before interest, taxes, depreciation, and amortization.
Carvana Shines in Stock Performance
However, Carvana also clearly beats CarMax in terms of stock performance. While CVNA has jumped over 129% since January, KMX lost more than half of its value during the same time period (see the image below).
On Wall Street, analysts have greeted CarMax’s latest earnings results with either Sell or Hold ratings, pointing to downside risks. On the contrary, Carvana continues to enjoy Wall Street backing, even as its planned addition to the benchmark S&P 500 index on December 22 continues to generate excitement among investors.
Wall Street Backs Carvana, Retreats from CarMax
This week, Citi analyst Ronald Josey reaffirmed his Buy rating on CVNA stock and raised his price target to $550, implying more than 18% upside. Josey argued that Carvana’s retail sales remained strong in November.
While BofA analyst Mike McGovern also raised his price target on KMX from $27 to $31, this new target still represents over 21% downside risk. McGovern maintained his Sell rating on the stock despite CarMax’s “constructive” recovery plan.
The analyst sees share loss to Carvana and an impact on investor sentiment from the retailer’s ongoing management transition.
CVNA or KMX: Which Stock Is Best Buy?
Across Wall Street, Carvana’s shares continue to carry a Strong Buy consensus rating based on 16 Buys and three Holds issued by 19 analysts over the past three months. Moreover, the average CVNA price target of $461 indicates a downside risk of 1.02%.
On the other hand, CarMax’s shares remain a Hold based on two Buys, 12 Holds, and three Sells issued by 17 analysts over the past three months. The average KMX price target of $38.08 implies more than 3% downside risk.
