CarMax (NYSE:KMX) Stock Falls 4.2% – What’s Next?

Shares of CarMax, Inc. (NYSE:KMX) were down 4.2% during trading on Wednesday. The company traded as low as $56.25 and last traded at $56.7640. 720,608 shares changed hands during mid-day trading, a decline of 77% from the average daily volume of 3,151,084 shares. The stock had previously closed at $59.23.

Key Stories Impacting CarMax

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: Results significantly exceeded expectations. Fiscal Q2 EPS was $1.16, versus the roughly $0.73 consensus, while revenue rose 19.5% year over year to $7.88 billion, beating estimates by approximately $850 million. CarMax Q2 Earnings Beat Estimates on Strong Unit Sales, CAF Growth
• Positive Sentiment: Sales momentum and financing helped. Retail used-vehicle unit sales increased 13.8%, comparable-store sales rose 13.0%, and combined retail and wholesale unit volume climbed 14.7%. Growth in CarMax Auto Finance, pricing initiatives and cost controls supported earnings. CarMax Reports Second Quarter Fiscal 2027 Results
• Positive Sentiment: Capital returns and restructuring could provide additional support. Management signaled that share repurchases could resume in the third quarter and is targeting $200 million in annualized cost savings by the end of fiscal 2027. CarMax Signals Resumption of Share Repurchases
• Positive Sentiment: Robert W. Baird raised its price target from $64 to $70 and maintained an Outperform rating, indicating confidence in the turnaround.

Wall Street Analysts Forecast Growth

A number of analysts recently weighed in on the stock. Benchmark reiterated a “hold” rating on shares of CarMax in a research report on Thursday, June 18th. Morgan Stanley set a $53.00 target price on shares of CarMax in a research note on Wednesday. UBS Group reiterated a “neutral” rating and issued a $62.00 target price on shares of CarMax in a report on Wednesday. Mizuho lifted their price target on shares of CarMax from $38.00 to $43.00 and gave the stock a “neutral” rating in a research report on Thursday, June 18th. Finally, Stephens boosted their price target on shares of CarMax from $66.00 to $74.00 and gave the company an “overweight” rating in a report on Friday, September 25th. Two research analysts have rated the stock with a Buy rating, thirteen have assigned a Hold rating and four have given a Sell rating to the company. According to data from MarketBeat, CarMax currently has an average rating of “Reduce” and an average price target of $56.71.

CarMax Price Performance

The company has a current ratio of 2.70, a quick ratio of 0.82 and a debt-to-equity ratio of 2.87. The firm has a market cap of $8.01 billion, a P/E ratio of 36.92, a PEG ratio of 1.80 and a beta of 1.17. The company has a fifty day moving average price of $59.56 and a two-hundred day moving average price of $50.20.

CarMax (NYSE:KMX) last issued its quarterly earnings data on Tuesday, September 29th. The company reported $1.16 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.73 by $0.43. CarMax had a return on equity of 6.64% and a net margin of 0.84%.The business had revenue of $7.88 billion during the quarter, compared to analyst estimates of $7.09 billion. During the same period in the previous year, the firm earned $0.64 EPS. CarMax’s quarterly revenue was up 19.5% compared to the same quarter last year. Equities analysts anticipate that CarMax, Inc. will post 2.73 earnings per share for the current year.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in the stock. Envestnet Asset Management Inc. raised its holdings in shares of CarMax by 1.6% during the second quarter. Envestnet Asset Management Inc. now owns 932,805 shares of the company’s stock worth $49,336,000 after acquiring an additional 14,976 shares during the period. State Street Corp boosted its stake in CarMax by 5.6% in the 2nd quarter. State Street Corp now owns 5,156,276 shares of the company’s stock worth $272,715,000 after purchasing an additional 271,216 shares during the period. Anchor Investment Management LLC acquired a new position in CarMax in the 2nd quarter worth $37,000. The Manufacturers Life Insurance Company boosted its stake in CarMax by 0.9% in the 2nd quarter. The Manufacturers Life Insurance Company now owns 2,420,139 shares of the company’s stock worth $128,001,000 after purchasing an additional 21,882 shares during the period. Finally, Capstone Financial Advisors Inc. increased its holdings in CarMax by 5.6% during the 2nd quarter. Capstone Financial Advisors Inc. now owns 9,500 shares of the company’s stock worth $502,000 after purchasing an additional 500 shares in the last quarter.

About CarMax

CarMax, Inc is a retailer of used vehicles operating in the United States. The company sells a broad selection of used cars, trucks and SUVs through its dealership network and online platform, offering customers the ability to research, purchase and arrange delivery for vehicles through an omnichannel shopping experience.

In addition to retail vehicle sales, CarMax provides vehicle financing through CarMax Auto Finance and offers customers access to extended protection products and related services.