Richmond, Virginia-based CarMax, Inc. (KMX) is one of the largest retailers of used vehicles in the U.S. and one of the nation's largest operators of wholesale vehicle auctions. With a market cap of $4.5 billion, CarMax operates through Sales Operations and Auto Finance segments.
The used vehicle retailer has significantly underperformed the broader market over the past year. KMX stock prices have tanked 58.2% on a YTD basis and 55.5% over the past 52 weeks, compared to the S&P 500 Index’s ($SPX) 16.4% returns in 2025 and 14.1% gains over the past year.
Narrowing the focus, KMX also underperformed the sector-focused Consumer Discretionary Select Sector SPDR Fund’s (XLY) 6.8% uptick in 2025 and 9.2% gains over the past 52 weeks.
CarMax’s stock prices observed a marginal dip in the trading session following the release of its Q2 results on Sept. 25. Due to softness in the broader market, the company’s retail used unit sales dropped 5.4%, comparable store used unit sales declined 6.3% and wholesale units dipped 2.2%. Meanwhile, it also observed a slight decrease in the average selling prices. Overall, CarMax’s topline came in at $6.6 billion, down 6% year-over-year and 6.5% below the Street expectations. Further, its EPS plunged 24.7% year-over-year to $0.64, missing the consensus estimates by 37.9%.
For the full fiscal 2026, ending in February, analysts expect KMX to deliver an adjusted EPS of $3.15, down 3.7% year-over-year. The company has a mixed earnings surprise history. While it missed the Street’s bottom-line estimates once over the past four quarters, it met or surpassed the projections on three other occasions.
Among the 19 analysts covering the KMX stock, the consensus rating is a “Hold.” That’s based on two “Strong Buys,” 13 “Holds,” one “Moderate Sell,” and three “Strong Sells.”
This configuration is notably pessimistic compared to two months ago, when the stock had a consensus “Moderate Buy” rating and nine analysts gave “Strong Buy” recommendations.
On Nov. 10, Morgan Stanley (MS) analyst Daniela Haigian downgraded KMX stock from “Overweight” to “Equal-weight” and lowered the price target from $56 to $35.
KMX’s mean price target of $41.67 represents a 22.1% premium to current price levels. Meanwhile, the street-high target of $60 suggests a staggering 75.7% upside potential.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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