CarMax, Inc. (KMX) AI Stock Analysis

CarMax, Inc. operates as a retailer specializing in pre-owned vehicles across the United States. It functions through two primary segments: CarMax Sales Operations and CarMax Auto Finance. The company sells domestic, imported, luxury, hybrid, and electric vehicles, while offering extended protection plans, reconditioning, and vehicle repair services. Older inventory, typically around 10 years old with over 100,000 miles, is sold through wholesale auctions. Through CarMax Auto Finance and third-party financial institutions, it provides financing options across a range of credit tiers. As of February 28, 2022, the company operated approximately 230 used car stores nationwide.

CarMax achieved a 5-year revenue CAGR of 6.4% from FY2021 to FY2026, though annual sales declined from $31.90B in FY2022 to $25.88B in FY2026. Annual net income decreased from $1.15B in FY2022 to $247.3M in FY2026, yielding net margins of 1.0% in FY2026 compared to 3.6% in FY2022. Operating margins were negative across FY2023 through FY2026, ending at -1.6% in FY2026. However, performance rebounded in the trailing twelve months, generating $29.46B in revenue and an operating margin of 2.8%. In the latest quarter ended August 31, 2026, quarterly revenue grew 17.7% year-over-year and quarterly earnings grew 81.6%.

As of August 31, 2026, CarMax held $170.5M in cash and short-term investments against $17.87B in total debt, resulting in net debt of $17.70B. Shareholders' equity was $6.30B, leading to a debt-to-equity ratio of 2.83, while the current ratio stood at 2.33. In FY2026, operating cash flow reached $1.78B and free cash flow was $1.24B. The company deployed cash toward $541.0M in capital expenditures and $642.8M in share buybacks, helping reduce its share count by 13.6% over five years.

KMX trades at a trailing P/E of 25.3x and a forward P/E of 21.6x, both higher than the median of its US-listed Consumer Cyclical peers at 18.0x and 14.1x, respectively. Its EV to EBITDA multiple of 16.8x also sits above the peer median of 11.1x, though its price-to-sales of 0.3x is below the peer median of 0.7x. Over the past year, the stock returned 23.2% compared to 16.8% for SPY. Over five years, KMX fell 61.0%, while SPY gained 83.0%.

Wall Street coverage includes 4 Strong Buy, 15 Hold, and 1 Sell ratings. The mean price target of $63.77 indicates 19.6% upside compared to the last close of $53.33. Over the last four quarters, CarMax posted 4 EPS beats. For the current fiscal year ending February 28, 2027, analysts project revenue of $29.03B and EPS of $3.23, representing 92.3% EPS growth. For the next fiscal year, 15 analysts forecast revenue of $29.39B and EPS of $3.53.

This page is an AI-written research summary of CarMax, Inc. (KMX). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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