CarMax’s Overweight Rating Maintained at Morgan Stanley, Price Target Cut to $75

• CarMax, Inc. (NYSE:KMX) reported earnings per share (EPS) of $1.38, beating the estimated $1.16 and showcasing significant growth from the previous year.
• The company achieved a revenue of approximately $7.55 billion, surpassing expectations and marking a 6% year-over-year growth.
• CarMax saw a 9% increase in units sold, with robust used-vehicle sales driving the company's performance.

CarMax, Inc. (NYSE:KMX), a leading retailer of used vehicles in the United States, operates through two segments: CarMax Sales Operations and CarMax Auto Finance. It offers a wide range of vehicles and related products, including extended protection plans. Competing with other used car retailers like AutoNation and Carvana, CarMax has established a strong presence in the market.

On June 20, 2025, CarMax reported earnings per share (EPS) of $1.38, surpassing the estimated $1.16. This strong performance is further highlighted by the company's first-quarter fiscal 2026 results, where EPS reached $1.38, exceeding the Zacks Consensus Estimate of $1.18. This marks a significant increase from the 97 cents per share recorded in the same quarter last year.

CarMax achieved a revenue of approximately $7.55 billion, exceeding the estimated $7.50 billion. The company's revenues for the first quarter of fiscal 2026 reached $7.55 billion, surpassing the expected $7.52 billion and reflecting a 6% year-over-year growth. This growth was primarily driven by robust used-vehicle sales, which rose by 7.5% to $6.1 billion.

The number of units sold also saw a notable increase of 9%, totaling 230,210 vehicles. CarMax's retail side showed particularly strong performance, with comparable store used unit sales rising by 8.1% compared to the previous year. During the quarter, CarMax purchased 336,000 vehicles from consumers and dealers, marking a 7% rise.

Following the release of its strong first-quarter results, CarMax's stock experienced a significant increase. The company has a price-to-earnings (P/E) ratio of approximately 21.05, indicating the market's valuation of its earnings. CarMax's debt-to-equity ratio of approximately 3.08 highlights its financial leverage, while a current ratio of around 2.31 suggests its ability to cover short-term liabilities.

William Blair reiterated its Outperform rating on CarMax (NYSE:KMX), pointing to solid sales momentum and a strong setup for profitability acceleration in 2025 driven by better operating efficiency.

The firm sees significant upside potential as CarMax gains national market share in used vehicles aged 0 to 10 years. With its current share at 3.7%, analysts believe the company can move closer to the double-digit levels it has reached in its most established markets. As this expansion plays out, profits are expected to outpace sales growth thanks to improved SG&A leverage and a more lucrative finance division.

While bullish on the long-term trajectory, William Blair also flagged key risks, including the complexities of managing a high volume of depreciating inventory, dependence on asset-backed securitizations to support its financing arm, and macro sensitivity tied to big-ticket consumer purchases.

Still, the firm views CarMax as well-positioned to scale its business meaningfully in the years ahead.

• Wedbush reaffirms an "Outperform" rating for CarMax, Inc. (NYSE:KMX) with a $90 price target despite rising loan delinquencies.
• CarMax's Auto Finance division reports an increase in loan delinquencies and net losses for May, indicating potential concerns over credit quality.
• The company's market capitalization is approximately $9.8 billion, with a trading volume of 4,881,038 shares on the NYSE.

CarMax, Inc. (NYSE:KMX) is a leading retailer of used vehicles in the United States, operating through two segments: CarMax Sales Operations and CarMax Auto Finance. CarMax Sales Operations is responsible for selling used vehicles, while CarMax Auto Finance provides financing options to customers. The company faces competition from other used car retailers like AutoNation and online platforms such as Carvana.

On June 18, 2025, Wedbush reaffirmed its "Outperform" rating for CarMax, with the stock priced at $64.35. Despite the "hold" action, Wedbush continues to support CarMax, as highlighted by Benzinga, even as loan delinquencies rise. The current stock price of KMX is $64.33, reflecting a slight decrease of 0.1, or approximately -0.16% in percentage terms.

CarMax's Auto Finance division has reported an increase in loan delinquencies and net losses for May, raising concerns about credit quality. This follows two months of relative stability. The data from May showed a decline in performance compared to April and a year-over-year deterioration. Delinquency and loss rates increased more sharply than typical seasonal trends.

Wedbush analyst Scott Devitt has reiterated an "Outperform" rating for CarMax with a $90 price target, despite the rising delinquencies. Devitt cautions that ongoing weakness in credit performance could impact future loan loss provisions, especially as CarMax increasingly targets lower-tier borrowers to maintain interest margins. The company's market capitalization stands at approximately $9.8 billion, with a trading volume of 4,881,038 shares on the NYSE:KMX.

• CarMax, Inc. (NYSE:KMX) stock dropped 17% following a weaker-than-expected earnings report.
• The company's fourth-quarter earnings per share (EPS) increased by 81% but fell short of analyst expectations.
• Despite recent challenges, CarMax's stock reaching a one-year low could be seen as a potential buying opportunity for investors.

CarMax, Inc. (NYSE:KMX) is a leading retailer of used vehicles in the United States. The company operates through two segments: CarMax Sales Operations and CarMax Auto Finance. CarMax is known for its no-haggle pricing and comprehensive vehicle inspection process. It competes with other used car retailers like AutoNation and Carvana. Recently, RBC Capital updated its rating for CarMax to "Underperform," maintaining its previous grade, with a stock price of $62.33 at the time of the announcement.

CarMax's stock experienced a significant decline, dropping 17% in a single day after releasing its earnings report. The company reported weaker-than-expected earnings, which negatively impacted investor sentiment. CarMax missed analysts' estimates and withdrew its guidance for long-term growth, contributing to the negative outlook. Despite these challenges, the stock had been trading at a premium, and the recent drop might present a buying opportunity.

The company's fourth-quarter earnings per share (EPS) showed a substantial 81% increase from the previous year, reaching $0.58 per share. However, this was below analyst expectations of $0.66. The current stock price of KMX is $62.33, reflecting a decrease of 3.50% or $2.26. Today, the stock has traded as low as $61.67 and as high as $64.19, indicating some volatility in the market.

Over the past year, KMX has reached a high of $91.25 and a low of $61.69. The company's market capitalization stands at approximately $9.52 billion, with a trading volume of 2,267,945 shares on the NYSE. Despite the recent challenges, CarMax's stock price reaching a one-year low might attract investors looking for potential value in the market.

• CarMax, Inc. (NYSE:KMX) stock dropped 17% following a weaker-than-expected earnings report.
• The company's fourth-quarter earnings per share (EPS) increased by 81% but fell short of analyst expectations.
• Despite recent challenges, CarMax's stock reaching a one-year low could be seen as a potential buying opportunity for investors.

CarMax, Inc. (NYSE:KMX) is a leading retailer of used vehicles in the United States. The company operates through two segments: CarMax Sales Operations and CarMax Auto Finance. CarMax is known for its no-haggle pricing and comprehensive vehicle inspection process. It competes with other used car retailers like AutoNation and Carvana. Recently, RBC Capital updated its rating for CarMax to "Underperform," maintaining its previous grade, with a stock price of $62.33 at the time of the announcement.

CarMax's stock experienced a significant decline, dropping 17% in a single day after releasing its earnings report. The company reported weaker-than-expected earnings, which negatively impacted investor sentiment. CarMax missed analysts' estimates and withdrew its guidance for long-term growth, contributing to the negative outlook. Despite these challenges, the stock had been trading at a premium, and the recent drop might present a buying opportunity.

The company's fourth-quarter earnings per share (EPS) showed a substantial 81% increase from the previous year, reaching $0.58 per share. However, this was below analyst expectations of $0.66. The current stock price of KMX is $62.33, reflecting a decrease of 3.50% or $2.26. Today, the stock has traded as low as $61.67 and as high as $64.19, indicating some volatility in the market.

Over the past year, KMX has reached a high of $91.25 and a low of $61.69. The company's market capitalization stands at approximately $9.52 billion, with a trading volume of 2,267,945 shares on the NYSE. Despite the recent challenges, CarMax's stock price reaching a one-year low might attract investors looking for potential value in the market.

CarMax, Inc. (NYSE:KMX) is a leading retailer of used cars in the United States. The company operates through two segments: CarMax Sales Operations and CarMax Auto Finance. It offers a wide range of vehicles and related products and services, including financing options. CarMax competes with other used car retailers like AutoNation and Carvana.

On April 10, 2025, CarMax reported its fiscal fourth-quarter earnings, revealing an earnings per share (EPS) of $0.58. This figure fell short of the estimated $0.63, as highlighted by Barrons. Despite this, CarMax's revenue reached $6.003 billion, surpassing the expected $5.980 billion. This indicates strong sales performance despite the earnings miss.

The company's earnings fell short of Wall Street's expectations, with analysts anticipating an EPS of $0.66. CarMax attributed this shortfall to higher borrowing costs, which have deterred some consumers from making significant purchases. This has contributed to a decline in the stock following the earnings report.

Despite the earnings miss, CarMax experienced substantial year-over-year growth in earnings. The stock saw a significant increase, with shares rising by 8.87%. This suggests that investors remain optimistic about the company's long-term prospects, despite the short-term challenges.

CarMax's financial health is reflected in its debt-to-equity ratio of approximately 2.84, indicating it has more than twice as much debt as equity. However, the company's current ratio of about 2.30 suggests a strong ability to cover its short-term liabilities with its short-term assets, providing a cushion against financial uncertainties.

CarMax, Inc. (NYSE:KMX) is a leading retailer of used cars in the United States. The company operates through two segments: CarMax Sales Operations and CarMax Auto Finance. It offers a wide range of vehicles and related products and services, including financing options. CarMax competes with other used car retailers like AutoNation and Carvana.

On April 10, 2025, CarMax reported its fiscal fourth-quarter earnings, revealing an earnings per share (EPS) of $0.58. This figure fell short of the estimated $0.63, as highlighted by Barrons. Despite this, CarMax's revenue reached $6.003 billion, surpassing the expected $5.980 billion. This indicates strong sales performance despite the earnings miss.

The company's earnings fell short of Wall Street's expectations, with analysts anticipating an EPS of $0.66. CarMax attributed this shortfall to higher borrowing costs, which have deterred some consumers from making significant purchases. This has contributed to a decline in the stock following the earnings report.

Despite the earnings miss, CarMax experienced substantial year-over-year growth in earnings. The stock saw a significant increase, with shares rising by 8.87%. This suggests that investors remain optimistic about the company's long-term prospects, despite the short-term challenges.

CarMax's financial health is reflected in its debt-to-equity ratio of approximately 2.84, indicating it has more than twice as much debt as equity. However, the company's current ratio of about 2.30 suggests a strong ability to cover its short-term liabilities with its short-term assets, providing a cushion against financial uncertainties.