Wall Street Zen Downgrades CarMax (NYSE:KMX) to Sell

CarMax (NYSE:KMX) was downgraded by Wall Street Zen from a “hold” rating to a “sell” rating in a note issued to investors on Saturday.

Several other equities research analysts have also commented on KMX. Stephens cut their price target on shares of CarMax from $39.00 to $36.00 and set an “equal weight” rating on the stock in a research note on Friday, December 19th. Bank of America upped their target price on CarMax from $27.00 to $31.00 and gave the company an “underperform” rating in a research report on Friday, December 19th. Benchmark reaffirmed a “hold” rating on shares of CarMax in a research report on Tuesday, December 16th. William Blair cut shares of CarMax from an “outperform” rating to a “market perform” rating in a report on Thursday, November 6th. Finally, Wedbush reduced their price target on shares of CarMax from $40.00 to $36.00 and set a “neutral” rating for the company in a research report on Friday, December 19th. One analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating, twelve have issued a Hold rating and five have issued a Sell rating to the company’s stock. According to data from MarketBeat, CarMax currently has an average rating of “Reduce” and a consensus price target of $40.07.

CarMax Trading Up 1.0%

KMX opened at $41.38 on Friday. The company has a debt-to-equity ratio of 2.74, a quick ratio of 0.51 and a current ratio of 1.99. CarMax has a one year low of $30.26 and a one year high of $89.47. The company has a market cap of $5.87 billion, a P/E ratio of 13.66, a PEG ratio of 0.99 and a beta of 1.35. The business’s 50-day simple moving average is $43.18 and its 200-day simple moving average is $46.58.

CarMax (NYSE:KMX) last announced its quarterly earnings results on Thursday, December 18th. The company reported $0.43 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.31 by $0.12. CarMax had a return on equity of 7.72% and a net margin of 1.77%.The firm had revenue of $5.79 billion during the quarter, compared to the consensus estimate of $5.66 billion. During the same period in the prior year, the company posted $0.81 earnings per share. The firm’s quarterly revenue was down 6.9% compared to the same quarter last year. As a group, equities research analysts expect that CarMax will post 3.23 EPS for the current fiscal year.

Hedge Funds Weigh In On CarMax

Several institutional investors and hedge funds have recently added to or reduced their stakes in KMX. Y Intercept Hong Kong Ltd acquired a new position in CarMax during the second quarter valued at approximately $5,758,000. Hantz Financial Services Inc. raised its stake in shares of CarMax by 45.3% in the 2nd quarter. Hantz Financial Services Inc. now owns 191,827 shares of the company’s stock valued at $12,893,000 after acquiring an additional 59,840 shares during the period. Fox Run Management L.L.C. purchased a new position in shares of CarMax in the 2nd quarter valued at $1,887,000. True North Advisors LLC lifted its holdings in shares of CarMax by 66.6% during the 3rd quarter. True North Advisors LLC now owns 123,742 shares of the company’s stock valued at $5,552,000 after acquiring an additional 49,450 shares in the last quarter. Finally, AlphaQuest LLC boosted its position in CarMax by 461.3% during the 2nd quarter. AlphaQuest LLC now owns 7,174 shares of the company’s stock worth $482,000 after purchasing an additional 5,896 shares during the period.

More CarMax News

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: New CEO with digital and customer-focus credentials — Keith Barr, who led IHG Hotels & Resorts, will become CarMax’s CEO on March 16; investors hope his hospitality/digital background can accelerate omnichannel improvements and customer experience upgrades that could stabilize sales and margins. Keith Barr Takes CarMax Helm As Digital And Customer Focus Deepens
• Positive Sentiment: Market narrative shift toward a turnaround plan — major outlets report the hire as signaling a strategic pivot to digital and service-led differentiation, which can be seen as a credible first step to rebuild investor confidence. CarMax Taps Hotel Veteran to Lead Turnaround
• Neutral Sentiment: Formal appointment and board changes — CarMax issued an official press release confirming Barr’s appointment, the effective date (March 16), and board role shifts (interim CEO returning to director duties). This clarifies succession but is procedural. CarMax Names Keith Barr as Chief Executive Officer
• Neutral Sentiment: Media skepticism on fit — several outlets note Barr isn’t an auto-industry executive, framing the hire as unconventional; that raises questions about how transferable his hotel/digital playbook will be to used-car retail. CarMax Names a New CEO. He’s Not a Car Guy.
• Negative Sentiment: Analyst maintains bearish view — J.P. Morgan’s Rajat Gupta kept a Sell rating citing elevated execution risk and intensifying competition from online rivals like Carvana, arguing a new CEO alone may not be enough to reverse margin pressure or lower inventory risk quickly. CarMax: Elevated Execution Risk and Intensifying Carvana Competition Justify Sell Rating Despite New CEO
• Negative Sentiment: Recent sharp share decline and fundamental headwinds — commentary and reporting highlight a recent plunge in the stock tied to falling demand and worries about the company’s ability to execute a turnaround, underscoring that investor optimism may be tenuous until operational results improve. Why CarMax Stock Just Crashed

CarMax Company Profile

CarMax (NYSE: KMX) is a leading retailer of used vehicles in the United States, offering customers a streamlined, no-haggle purchasing experience. The company’s inventory spans a broad range of makes and models, each of which undergoes a comprehensive inspection process before being offered for sale. Customers can shop in person at CarMax’s retail locations or browse the company’s online platform, which provides detailed vehicle histories, virtual tours and contactless purchasing options.

Originally launched in 1993 as a division of Circuit City, CarMax became an independent, publicly traded company in 1997.