CarMax (KMX) reported earnings 30 days ago. What's next for the stock?
On April 21, 2026, CarMax Inc (KMX) shares fell 4.0% to $39.04, continuing a downward trend that has seen the stock decline 6.3% over the past week and 6.7% ove
Car rental and used car stocks are seeing a wide divergence in their performance. Three notable names across these industries are Avis Budget Group NASDAQ: CAR, CarMax NYSE: KMX, and Carvana NYSE: CVNA.
Carmax NYSE: KMX shares are trading near five-year lows, offering an intriguing opportunity. However, as insulated as it is from financial implosion, market forces are aligned to keep this stock from rising.
CarMax appears undervalued after a sharp sell-off driven by weak earnings and guidance, with much near-term downside likely priced in. KMX's strategic pivot to older, more affordable vehicles targets value-conscious and tier 2 customers, aligning with current consumer trends and economic headwinds. Suspending stock buybacks to prioritize operational turnaround and financial health is prudent given economic uncertainty and thin net income margins.
KMX tops Q4 EPS and revenue estimates, but pricing moves to lift sales squeeze retail margins as it targets bigger SG&A cuts.
CarMax, Inc. remains a Buy in the low $40s, with a fair value of ~$50, offering 15%+ upside despite near-term headwinds. KMX faces margin compression from weak used car pricing, higher loan loss provisions, and a strategic shift toward Tier 2 borrowers in its financing arm. Cost-cutting initiatives, paused buybacks, and conservative guidance position KMX for improved cash flow and potential EPS recovery in fiscal 2028.
The headline numbers for CarMax (KMX) give insight into how the company performed in the quarter ended February 2026, but it may be worthwhile to compare some of its key metrics to Wall Street estimates and the year-ago actuals.
CarMax (KMX) came out with quarterly earnings of $0.34 per share, beating the Zacks Consensus Estimate of $0.22 per share. This compares to earnings of $0.64 per share a year ago.
CarMax swung to a loss as it implements a turnaround strategy that has included price cuts to reestablish its place in the used-car market.
The move comes after Starboard urged the used-car retailer's new chief executive officer, Keith Barr, to revamp its pricing framework, streamline its digital processes, and cut costs.
Besides Wall Street's top-and-bottom-line estimates for CarMax (KMX), review projections for some of its key metrics to gain a deeper understanding of how the company might have fared during the quarter ended February 2026.