ALTSTATION.IO

CarMax, Inc. (KMX) Stock Analysis

By Nova Skye | AltStation.io | Updated February 07, 2026

Price

$47.01

Change

+3.39%

Market Cap

$6.90B

Avg Volume

4.2M

Company Overview

CarMax, Inc. is a leading retailer of used vehicles in the United States, headquartered in Richmond, Virginia. They sell a wide variety of used cars, including domestic, imported, luxury, hybrid, and electric models. Customers range from everyday drivers to those seeking luxury vehicles. CarMax also offers related services like vehicle auctions, extended protection plans, and repair services, along with financing options through CarMax Auto Finance.

CarMax holds a strong competitive position as a market leader in the used car sector. Its edge comes from a no-haggle pricing model and a large inventory, which provides customers with clear pricing and a wide selection. Key competitors include AutoNation and Vroom, as well as traditional dealerships. However, the surge in online vehicle sales from companies like Carvana poses a threat, as consumers increasingly favor convenience and digital transactions.

Currently, CarMax is in a growth phase, bolstered by robust demand for used vehicles. In recent quarters, despite some economic headwinds, the company has reported revenue growth, driven by strong sales figures. CarMax is also expanding its online capabilities to capture the growing e-commerce market in vehicle sales. Strategic shifts towards enhancing digital sales platforms indicate their commitment to adapting to changing consumer preferences.

Key Financials

Market Cap

$6.90B

Revenue

$27.83B

EBITDA

$1.06B

Gross Margin

12.4%

Profit Margin

1.6%

Revenue Growth

-6.7%

Total Cash

$204.94M

Total Debt

$18.04B

Free Cash Flow

$648.44M

52-Week Price Performance Analysis

Price Statistics

P/E Ratio

15.41

Forward P/E

18.35

Beta

1.35

52-Week High

$89.47

52-Week Low

$30.26

EPS

$3.05

50-Day Avg

$42.18

200-Day Avg

$53.19

Price/Book

1.11

Technical Analysis

Over the past 52 weeks, CarMax, Inc. (KMX) has exhibited a strong downtrend, declining approximately 44.8%, with the stock price currently at $47.01. Key support levels are evident around $42, marking past lows that could serve as a defensive line if selling pressure increases, while resistance is identified at $50, which has acted as a ceiling in recent movements. Notably, the chart displays a series of lower highs and lower lows, confirming the prevailing bearish trend. In the recent weeks, there has been a slight uptick in momentum, suggesting a potential short-term reversal as the price has moved above $45, albeit still below the critical resistance. The current price is significantly below its 52-week high of approximately $90, indicating a bearish sentiment and suggesting further downside risk if support levels fail to hold. Overall, the momentum shift observed is weak and largely corrective within a dominant downtrend.

Recent News and Developments

CarMax, Inc

(KMX) has seen several developments in the past week, including an analyst rating upgrade, a significant institutional stake increase, and notable price movements.

Market Update

Here are 3-5 specific news items:

Market Update

### CarMax Receives Analyst Upgrade from Wall Street Zen
On Saturday, January 31, 2026, Wall Street Zen upgraded CarMax from a “sell” rating to a “hold” rating. This adjustment indicates a slightly more positive outlook from the research provider, though the broader sell-side sentiment for KMX remains a “Reduce” with a consensus target price of $39.93. This upgrade suggests a less negative view on

Market Sentiment and Analyst Recommendations

Bull Case

CarMax trades at 15.41x earnings, which is reasonable for a company with $27.83B in revenue and a dominant 10% share of the US used car market. The recent analyst upgrade from Wall Street Zen and Atlantic Union Bankshares’ stake increase suggest institutional investors see value at current levels. The $204.94M cash position provides a cushion, and the company’s scale gives it pricing power in a fragmented industry. If used car demand stabilizes and inventory turns improve, margin expansion is possible without revenue growth. The stock has fallen 44.8% from its 52-week high, creating a potential entry point for mean reversion trades if the company can stabilize operations.

Bear Case

Revenue declined 6.7% year-over-year, indicating serious demand headwinds in the used car market. The debt load of $18.04B against just $204.94M in cash is concerning, leaving little room for error if consumer credit tightens further. The 52-week range of $30 to $89 shows massive volatility and investor uncertainty about the business model. The analyst consensus price target of $39.15 sits 17% below the current $47.01 price, suggesting downside risk despite the recent upgrade. CarMax’s profitability depends heavily on retail credit availability and consumer spending on vehicles, both vulnerable to recession or rising interest rates.

What to Watch

Monitor Q2 2026 earnings for same-store sales trends and gross profit per unit, which will signal whether demand is stabilizing or deteriorating further. Watch the debt-to-equity ratio closely, especially if the company needs to refinance near-term maturities at higher rates. Track used car auction prices and wholesale inventory levels as leading indicators of CarMax’s buying costs and pricing power. The $50 resistance level is critical on the chart; a break above it would suggest a genuine trend reversal, while a drop below the $42 support would likely trigger further selling. Pay attention to credit loss provisions in earnings calls, as rising default rates would signal consumer stress and margin compression ahead.

Analyst Consensus

HOLD

Based on 13 analyst opinions

Low Target

$19.00

Mean Target

$39.15

High Target

$99.00

Earnings and Financial Data

Sector

Consumer Cyclical

Industry

Auto & Truck Dealerships

Employees

28,000

Earnings & Dividends

Next Earnings

Dec 18, 2025

EPS (Trailing)

$3.05

Dividend Yield

None

Payout Ratio

Frequently Asked Questions

Is KMX a good stock to buy?

Currently, analysts recommend a HOLD on CarMax (KMX) with a price target of $39.15. Given its current price of $47.01, the stock appears overvalued compared to this target.

What is KMX’s price target?

The analyst price target for CarMax is $39.15. This represents a potential downside of about 16.8% from the current price of $47.01.

Does KMX pay a dividend?

CarMax does not pay a dividend, which is a consideration for income-focused investors. The lack of a dividend can mean more reinvestment into growth, but it also might deter some investors.

What is KMX’s P/E ratio?

CarMax has a P/E ratio of 15.41 and a forward P/E of 18.35. This indicates that the stock could be expected to grow in earnings, but at a rate that isn’t reflected in a particularly low valuation.

How has KMX performed in the last year?

KMX’s stock price has fluctuated between $30.26 and $89.47 in the past 52 weeks. This significant volatility reflects changing market conditions and consumer sentiment towards the auto dealership sector.

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Disclaimer: This report is for informational purposes only and does not constitute financial advice. The analysis and opinions expressed are those of AltStation.io and should not be relied upon as the sole basis for investment decisions. Always conduct your own research and consult with a qualified financial advisor before making investment decisions. Past performance does not guarantee future results. Updated February 07, 2026.