Carmax Inc (KMX)
NYSE:KMX
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CarMax
(NYSE:KMX)
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Rating:60Neutral
Price Target:
$48.00
▲(2.74% Upside)
Action:ReiteratedDate:02/13/26
The score is driven primarily by mixed financial performance—strong cash flow improvement and stable gross margin offset by declining revenue and high leverage. Earnings call commentary adds pressure due to sales and EPS declines despite credible cost-cutting and finance-segment tailwinds. Technicals and valuation are both moderate, consistent with a stock in partial recovery but without strong fundamental momentum.
Positive Factors
Market position & scale
CarMax's national scale and recognized brand provide durable competitive advantages: broad inventory from trade‑ins, purchasing and marketing leverage, and multi‑market footprint that supports fixed‑cost absorption and omnichannel distribution, sustaining unit flow and customer reach.
Negative Factors
High leverage
Elevated leverage (debt/equity ~2.75) constrains capital flexibility and raises refinancing and interest‑rate sensitivity. High debt limits room for strategic investments, increases default risk in stress scenarios, and makes sustained margin recovery more urgent to service obligations.
Read all positive and negative factors
Positive Factors
Negative Factors
Market position & scale
CarMax's national scale and recognized brand provide durable competitive advantages: broad inventory from trade‑ins, purchasing and marketing leverage, and multi‑market footprint that supports fixed‑cost absorption and omnichannel distribution, sustaining unit flow and customer reach.
Read all positive factors
CarMax (KMX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.62B
Dividend YieldN/A
Average Volume (3M)2.98M
Price to Earnings (P/E)23.1
Beta (1Y)0.94
Revenue Growth0.12%
EPS Growth2.78%
CountryUS
Employees30,048
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)0.43
Shares Outstanding141,796,650
10 Day Avg. Volume2,571,929
30 Day Avg. Volume2,977,461
Financial Highlights & Ratios
PEG Ratio4.11
Price to Book (P/B)2.06
Price to Sales (P/S)0.46
P/FCF Ratio82.35
Enterprise Value/Market Cap3.52
Enterprise Value/Revenue0.84
Enterprise Value/Gross Profit7.41
Enterprise Value/Ebitda21.90
Forecast
1Y Price Target
$37.15Price Target Upside-20.48% Downside
Rating ConsensusHold
Number of Analyst Covering9
EPS Forecast (FY)2.47
Revenue Forecast (FY)$25.72B
CarMax Business Overview & Revenue Model
Company Description
CarMax, Inc., together with its subsidiaries, operates as a retailer of used vehicles in the United States. The company operates through two segments, CarMax Sales Operations and CarMax Auto Finance. It offers customers a range of makes and models...
How the Company Makes Money
CarMax generates revenue primarily through the sale of used vehicles, which constitutes its main revenue stream. The company also earns money through the sale of vehicle financing and extended service plans. Financing options are provided through ...
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 Earnings Call Summary
Earnings Call Date:Dec 23, 2025
(Q3-2026)
| % Change Since: |
Next Earnings Date:Apr 14, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant challenges faced by CarMax, including declines in sales and profitability, and pressures on retail and wholesale prices. However, the company has taken steps to address these issues, such as digital development, cost reduction initiatives, and growth in their finance segment. Despite these efforts, the negative trends in sales and earnings create a cautious outlook.Positive Updates
Digital and Omnichannel Development
CarMax has invested significantly in digital capabilities, allowing customers to shop how and where they want, aiming to improve digital shopping experience and conversion rates.
Negative Updates
Decline in Total Sales
Total sales fell 6.9% compared to the previous year, with retail unit sales declining by 8% and used unit comps down by 9%.
Read all updates
Q3-2026 Updates
Positive
Negative
Digital and Omnichannel Development
CarMax has invested significantly in digital capabilities, allowing customers to shop how and where they want, aiming to improve digital shopping experience and conversion rates.
Read all positive updates
Company Guidance
During the CarMax third quarter fiscal year 2026 earnings call, several key metrics were discussed, highlighting the company's current challenges and strategic priorities. CarMax reported total sales of $5.8 billion, a decrease of 6.9% year-over-year, with retail unit sales down 8% and used unit comps declining by 9%. The average selling price for used vehicles was $26,400, reflecting a $230 increase from the previous year. Despite these figures, the company's net earnings per diluted share dropped to $0.43 from $0.81 in the prior year. CarMax is focusing on several initiatives to drive improvement, including lowering margins to enhance competitiveness, investing in marketing to improve sales trends, and achieving at least $150 million in SG&A savings by the end of fiscal year 2027. The company is also leveraging opportunities in CarMax Auto Finance (CAF) and ancillary products to boost profitability, with CAF income rising by 9% to $175 million. Additionally, CarMax is reassessing its cost structure, including a comprehensive review of COGS and digital platform enhancements, to provide a more streamlined customer experience.CarMax Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
60
Neutral
Cash Flow
70
Positive
| Breakdown | TTM | Feb 2025 | Feb 2024 | Feb 2023 | Feb 2022 | Feb 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 27.83B | 28.21B | 28.21B | 31.13B | 33.20B | 20.09B |
| Gross Profit | 3.15B | 3.22B | 3.04B | 3.24B | 3.88B | 2.94B |
| EBITDA | 1.07B | 1.09B | 1.06B | 1.04B | 1.87B | 1.29B |
| Net Income | 457.84M | 500.56M | 479.20M | 484.76M | 1.15B | 746.92M |
Balance Sheet | ||||||
| Total Assets | 25.56B | 27.40B | 27.20B | 26.18B | 26.34B | 21.54B |
| Cash, Cash Equivalents and Short-Term Investments | 204.94M | 246.96M | 574.14M | 314.76M | 102.72M | 132.32M |
| Total Debt | 16.68B | 19.43B | 19.31B | 18.93B | 19.27B | 15.66B |
| Total Liabilities | 19.50B | 21.16B | 21.12B | 20.57B | 21.10B | 17.18B |
| Stockholders Equity | 6.06B | 6.24B | 6.07B | 5.61B | 5.24B | 4.36B |
Cash Flow | ||||||
| Free Cash Flow | 1.95B | 156.50M | -6.69M | 860.62M | -2.86B | 503.22M |
| Operating Cash Flow | 2.48B | 624.44M | 458.62M | 1.28B | -2.55B | 667.76M |
| Investing Cash Flow | -524.35M | -461.00M | -467.00M | -425.77M | -523.75M | -128.18M |
| Financing Cash Flow | -2.02B | -453.54M | 307.79M | -710.18M | 3.10B | -424.02M |
CarMax Technical Analysis
Positive
46.72
Price Trends
43.13
Positive
41.96
Positive
48.12
Negative
Market Momentum
0.51
Negative
65.65
Neutral
89.59
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KMX, the sentiment is Positive. The current price of 46.72 is above the 20-day moving average (MA) of 42.38, above the 50-day MA of 43.13, and below the 200-day MA of 48.12, indicating a neutral trend. The MACD of 0.51 indicates Negative momentum. The RSI at 65.65 is Neutral, neither overbought nor oversold. The STOCH value of 89.59 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KMX.
CarMax Risk Analysis
CarMax disclosed 26 risk factors in its most recent earnings report. CarMax reported the most risks in the "Production" 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 |
|---|---|---|---|---|---|---|---|
63 Neutral | $10.26B | 11.20 | 16.04% | 3.14% | 2.25% | 8.92% | |
62 Neutral | $3.94B | 9.17 | 9.29% | ― | 8.07% | 60.95% | |
62 Neutral | $4.01B | 15.78 | 10.85% | 0.49% | 19.45% | -24.27% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $6.36B | 10.30 | 12.08% | 0.64% | 8.56% | 17.84% | |
60 Neutral | $6.62B | 23.09 | 7.39% | ― | 0.12% | 2.78% | |
58 Neutral | $6.96B | 12.12 | 26.70% | ― | 6.06% | -1.71% |
* Consumer Cyclical Sector Average
KMX
CarMax
46.72
-20.78
-30.79%
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204.00
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GPI
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338.14
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-14.74%
LAD
Lithia Motors
273.10
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-5.42%
PAG
Penske Automotive Group
156.12
9.63
6.58%
CarMax Corporate Events
Business Operations and StrategyExecutive/Board Changes
CarMax Appoints Keith Barr as New President and CEO
Positive
Feb 12, 2026
On February 10, 2026, CarMax’s board appointed former InterContinental Hotels Group chief executive Keith Barr as president and CEO, effective March 16, 2026, and named him to an expanded 10-member board with a compensation package anchored ...
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.