KMX$38.66
$38.79
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Powered by LiveAIOverall Analysis
HoldCarMax (KMX) exhibits mixed signals. Fundamentally, it shows resilience in a challenging auto market, but its valuation remains a concern. Thematic exposure to the used car market is present but facing headwinds. Technicals suggest an oversold condition and potential for a short-term bounce.
Thematic
CarMax operates within the automotive retail sector, specifically focusing on used vehicles. While the used car market has experienced significant demand and price appreciation in recent years due to supply chain issues affecting new car production, the long-term sustainability of these trends and potential shifts in consumer behavior are key considerations.
Fundamental
CarMax shows significant revenue, but profitability has been challenged recently, with declining net margins and negative operating income in some periods. The balance sheet indicates substantial debt, and free cash flow has been volatile.
Technical
CarMax's stock is trading below key moving averages, indicating a bearish short-to-medium term trend. However, current momentum indicators suggest it may be oversold and could see a temporary bounce.
| Factor | Score |
|---|---|
| Used Vehicle Market Demand | 60 |
| Disruption & Innovation | 70 |
| Economic Sensitivity | 40 |
| Regulatory Environment | 50 |
| Financing Services (CAF) | 50 |
| Factor | Score |
|---|---|
| Valuation | 50 |
| Profitability | 30 |
| Growth | 30 |
| Balance Sheet Health | 35 |
| Cash Flow | 40 |
| Factor | Score |
|---|---|
| Trend Analysis | 40 |
| Momentum | 55 |
| Volume Confirmation | 50 |
| Support & Resistance | 50 |
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Powered by LiveAIBullish Points (7)
Improving Profitability
CarMax reported a net profit margin of 2.79% in Q1 2025, an improvement from the previous quarter and indicating increased efficiency in converting revenue to profit. This is above the industry average for Automotive Aftermarket companies. [42]
Positive Analyst Outlook
The average analyst price target for CarMax is around $80.63, with a consensus rating of 'Moderate Buy' from 17 analysts. This suggests an implied upside potential of approximately 24.05% based on recent ratings. [13]
Bearish Points (7)
Elevated Debt-to-Equity Ratio
CarMax's debt-to-equity ratio is significantly high, reported at 2.983 as of May 31, 2025, and has been as high as 3.10, indicating a leveraged financial structure that could pose risks. [2, 10, 22]
Slowing Revenue Growth
CarMax's annual revenue for 2025 was $26.353 billion, a 0.69% decline from 2024, and the trailing twelve months revenue shows a 3.17% increase year-over-year as of May 31, 2025, indicating a slowdown in top-line growth. [16]
Calendar
September 2025
24
Next Earnings Date
H: $1.16
A: $1.06
L: $0.90
H: 7.31B
A: 7.10B
L: 6.94B
Profile
CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. The company operates in two segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; used vehicle auctions; extended protection plans to customers at the time of sale; and reconditioning and vehicle repair services. The CarMax Auto Finance segment provides financing alternatives for retail customers across a range of credit spectrum and arrangements with various financial institutions. The company was founded in 1993 and is based in Richmond, Virginia.
Seasonals
Price Target
84.65 USD
The 39 analysts offering 1 year price forecasts for KMX have a max estimate of 122.13 and a min estimate of 52.00.
Debt Level and Coverage
Financial Position Analysis
Ownership
Capital Structure
Valuation - Summary
Valuation - Ratios
Revenue to Profit Conversion
Balance Sheet
Income Statement
Cash Flow
Related Companies
Powered by LiveAIWeight: 98
As the largest automotive retailer in the U.S., AutoNation operates extensive used car sales operations, directly competing with CarMax's model for market share in both physical and digital channels.
Weight: 97
A pure online used car retailer, Carvana is a direct, disruptive competitor to CarMax, focusing on e-commerce and home delivery for used vehicle sales.
Weight: 95
A diversified international transportation services company and major automotive retailer with substantial used car sales, operating a network of dealerships that compete directly with CarMax.
Weight: 93
One of the largest automotive retailers in the U.S., Lithia has significant used vehicle sales and a growing online presence, making it a key competitor in the broader automotive retail space.