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The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.

Zacks Premium includes access to the Zacks Style Scores as well.

What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.

VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.82% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: CarMax (KMX - Free Report) CarMax, Inc. is the largest retailer of used vehicles in the United States. In fiscal 2026 (ended Feb. 28, 2026), the company sold approximately 781,000 used vehicles at retail. It is also one of the nation’s largest operators of wholesale vehicle auctions, with roughly 538,000 vehicles sold in fiscal 2026.

KMX is a #1 (Strong Buy) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 16.82; value investors should take notice.

Eight analysts revised their earnings estimate higher in the last 60 days for fiscal 2027, while the Zacks Consensus Estimate has increased $0.42 to $3.15 per share. KMX also boasts an average earnings surprise of +56%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, KMX should be on investors' short list.

CarMax Today

$52.97 +1.32 (+2.56%)

As of 10:36 AM Eastern

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$30.26▼

$65.2825.80

$57.85

CarMax Inc. NYSE: KMX operates in the used-car retail industry, where affordability pressures and elevated borrowing costs have weighed on consumers.

But the company recently received a bullish double upgrade from Bank of America, raising the possibility that its midyear rally could rev up again.

Get CarMax alerts:

That’s a meaningful change in tone. Wall Street has largely treated the used car giant as a show-me story, with analysts waiting for proof that its omnichannel strategy could deliver consistent unit growth and better margins.

A double upgrade, which skips over a neutral rating entirely, signals that at least one major firm believes CarMax is making enough progress to justify a more bullish outlook.

CarMax Is Benefiting From an FTC PolicyThe catalyst for CarMax comes down to transparency. In March, the Federal Trade Commission (FTC) warned 97 auto dealership groups about deceptive pricing practices, followed by additional guidance in September. For years, CarMax has been disadvantaged by posting an "all-in" price that was, on paper, higher than prices some competitors advertised without including mandatory fees.

But those additional fees could appear later in the buying process. Now the FTC is requiring dealers to list their all-in prices, which works to CarMax's advantage.

In other words, shoppers comparing listings online were often making an apples-to-oranges comparison. A competitor’s lower sticker price could look like the better deal until documentation fees, reconditioning charges, and other add-ons appeared at the closing table. CarMax’s no-haggle pricing, long one of its key brand differentiators, was being penalized for the very thing that made it consumer-friendly.

Used Car Market Tailwinds Are Hard to IgnoreIt's a real story, but it's not new. So why now? The used car market has shown resilience in 2026, supported by demand from budget-conscious buyers. The same pressures that have impacted new car prices (tariffs, inflation, etc.) are making used vehicles more appealing. The gap between new and used cars is approximately $16,000, the widest it has ever been.

That gap pushes budget-conscious buyers who might otherwise have purchased a new vehicle into the used market. As the nation’s largest used car retailer, CarMax is well-positioned to capture a large share of that demand.

Plus, according to Mordor Intelligence, the U.S. used car market is valued at approximately $871 billion and could reach $980 billion by 2031. Even modest market share gains in a market that size can translate into significant revenue growth for a company with CarMax’s scale.

Second-Quarter Results Show the Thesis Is WorkingCarMax's fiscal 2027 (FY2027) second-quarter earnings report provided encouraging evidence of its turnaround. The company reported revenue of $7.88 billion, which was up 19.5% year over year (YOY).

The earnings story was even stronger. CarMax delivered diluted earnings per share (EPS) of $1.16. That beat expectations by approximately 59% and came in over 81% higher YOY.

Investors should also keep an eye on CarMax Auto Finance (CAF), the company’s in-house lending arm. CAF contributes a meaningful share of CarMax’s profits, and its provision for loan losses offers a window into the financial health of the company’s customers. If credit quality holds up as more buyers shift to used vehicles, that would ease one of the risks that has weighed on the stock.

The company is expected to report Q3 FY2027 earnings on Dec. 17. Before then, CarMax will host a strategic update on Nov. 3, which Bank of America highlighted as a near-term catalyst. But for long-term investors, this may be a time to look at buying KMX on weakness. Between now and the next earnings report, the stock is likely to trade on broader sentiment toward consumer spending and interest rates, as well as management's strategic outlook, creating entry points for patient investors.

Is KMX Ready for a Second Act?It's not like investors ignored the FTC action. The KMX share price is up around 35% year-to-date. However, that includes a drop of over 17% since hitting its 52-week high in August.

The question for investors is whether they are losing confidence in the stock or if this is just a healthy pullback. The technicals signal more of the latter. The relative strength index (RSI) hit an oversold level near 29 on Oct. 14, and investors rushed in to provide support.

The rebound confirms support at a level the stock reached in June. That was also a level that acted as resistance at two other points in 2026. When former resistance becomes support, technical analysts generally read it as a sign that buyers are willing to defend that price, which can set the stage for the next leg higher.

Some analysts are coming around to the current price action. The CarMax analyst forecasts on MarketBeat have 19 analysts giving KMX a consensus Hold rating with a price target of $57.85.

In addition to Bank of America's Oct. 15 double upgrade from Underperform to Buy, which included a price-target increase from $50 to $65, UBS Group set a $65 price target on CarMax.

Consensus price targets also tend to lag fresh upgrades. If more analysts follow Bank of America’s lead, the consensus target could move higher in the coming weeks.

Should You Invest $1,000 in CarMax Right Now?Before you consider CarMax, you'll want to hear this.

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For those looking to find strong Retail-Wholesale stocks, it is prudent to search for companies in the group that are outperforming their peers. Is CarMax (KMX - Free Report) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Retail-Wholesale sector should help us answer this question.

CarMax is one of 183 individual stocks in the Retail-Wholesale sector. Collectively, these companies sit at #8 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.

The Zacks Rank is a proven system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. CarMax is currently sporting a Zacks Rank of #1 (Strong Buy).

Over the past three months, the Zacks Consensus Estimate for KMX's full-year earnings has moved 14.9% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.

Our latest available data shows that KMX has returned about 36.2% since the start of the calendar year. At the same time, Retail-Wholesale stocks have gained an average of 0.8%. As we can see, CarMax is performing better than its sector in the calendar year.

Abercrombie & Fitch (ANF - Free Report) is another Retail-Wholesale stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 20.8%.

For Abercrombie & Fitch, the consensus EPS estimate for the current year has increased 7.7% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).

Looking more specifically, CarMax belongs to the Automotive - Retail and Wholesale - Parts industry, a group that includes 6 individual stocks and currently sits at #45 in the Zacks Industry Rank. This group has lost an average of 2.8% so far this year, so KMX is performing better in this area.

Abercrombie & Fitch, however, belongs to the Retail - Apparel and Shoes industry. Currently, this 38-stock industry is ranked #153. The industry has moved -9.4% so far this year.

CarMax and Abercrombie & Fitch could continue their solid performance, so investors interested in Retail-Wholesale stocks should continue to pay close attention to these stocks.

CarMax (KMX - Free Report) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.

The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.

The power of a changing earnings picture in determining near-term stock price movements makes the Zacks rating system highly useful for individual investors, since it can be difficult to make decisions based on rating upgrades by Wall Street analysts. These are mostly driven by subjective factors that are hard to see and measure in real time.

Therefore, the Zacks rating upgrade for CarMax basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.

Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. That's partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.

For CarMax, rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company's underlying business. And investors' appreciation of this improving business trend should push the stock higher.

Harnessing the Power of Earnings Estimate RevisionsEmpirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, so it could be truly rewarding if such revisions are tracked for making an investment decision. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .

Earnings Estimate Revisions for CarMaxThis used car dealership chain is expected to earn $3.09 per share for the fiscal year ending February 2027, which represents no year-over-year change.

Analysts have been steadily raising their estimates for CarMax. Over the past three months, the Zacks Consensus Estimate for the company has increased 14.4%.

Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.

You can learn more about the Zacks Rank here >>>

The upgrade of CarMax to a Zacks Rank #1 positions it in the top 5% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.

CarMax (KMX - Free Report) has been on a downward spiral lately with significant selling pressure. After declining 15.3% over the past four weeks, the stock looks well positioned for a trend reversal as it is now in oversold territory and there is strong agreement among Wall Street analysts that the company will report better earnings than they predicted earlier.

We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillator that measures the speed and change of price movements.

RSI oscillates between zero and 100. Usually, a stock is considered oversold when its RSI reading falls below 30.

Technically, every stock oscillates between being overbought and oversold irrespective of the quality of their fundamentals. And the beauty of RSI is that it helps you quickly and easily check if a stock's price is reaching a point of reversal.

So, by this measure, if a stock has gotten too far below its fair value just because of unwarranted selling pressure, investors may start looking for entry opportunities in the stock for benefiting from the inevitable rebound.

However, like every investing tool, RSI has its limitations, and should not be used alone for making an investment decision.

Here's Why KMX Could Experience a TurnaroundThe heavy selling of KMX shares appears to be in the process of exhausting itself, as indicated by its RSI reading of 28.97. So, the trend for the stock could reverse soon for reaching the old equilibrium of supply and demand.

This technical indicator is not the only factor that calls for a potential rebound for the stock. There is a fundamental indicator as well. A strong agreement among sell-side analysts covering KMX in raising earnings estimates for the current year has led to an increase in the consensus EPS estimate by 12.9% over the last 30 days. And an upward trend in earnings estimate revisions usually translates into price appreciation in the near term.

Moreover, KMX currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises. This is a more conclusive indication of the stock's potential turnaround in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

CarMax, Inc. (NYSE:KMX – Get Free Report)’s stock price was down 4.2% during trading on Wednesday. The company traded as low as $56.25 and last traded at $56.7640. 720,608 shares traded hands during trading, a decline of 77% from the average session volume of 3,151,084 shares. The stock had previously closed at $59.23.

Key Headlines Impacting CarMax Here are the key news stories impacting CarMax this week:

Positive Sentiment: CarMax reported fiscal Q2 revenue of $7.88 billion, up 19.5% year over year, while adjusted earnings of $1.16 per share exceeded the $0.73 consensus estimate. Used-vehicle unit sales rose sharply, indicating that competitive pricing is driving demand. CarMax Q2 Earnings Beat Estimates Positive Sentiment: Several analysts raised their price targets following the earnings beat. Robert W. Baird lifted its target to $70 and maintained an outperform rating, while RBC raised its target to $56 with a sector-perform rating. CarMax Analysts Boost Their Forecasts Positive Sentiment: Management signaled a potential resumption of share repurchases and is targeting approximately $200 million in fiscal 2027 exit-rate cost savings, supporting the company’s broader “Shift into GEAR” turnaround plan. CarMax will provide a strategic update on November 3. CarMax Signals Resumption of Share Repurchases Neutral Sentiment: Zacks characterized KMX as a strong value stock, which may attract valuation-focused investors, although the stock remains subject to broader consumer-spending and used-car-market conditions. Why CarMax Is a Strong Value Stock Negative Sentiment: Investors are also focusing on weaker margins: retail gross profit per used vehicle fell $111 to $2,105, and wholesale gross profit per unit declined $135 to $858. Management expects CarMax Auto Finance income to be slightly lower in fiscal 2027, raising questions about earnings durability. CarMax Margin Pressure Analysis Negative Sentiment: Analyst opinion remains divided. BNP Paribas Exane reaffirmed a strong-sell rating with a $48 target, while other estimates remain below the current trading level, indicating continued concerns about valuation and profitability. Analysts Set New Price Targets KMX has been the subject of several research analyst reports. Stephens increased their target price on CarMax from $66.00 to $74.00 and gave the stock an “overweight” rating in a research report on Friday, September 25th. UBS Group boosted their price target on CarMax from $57.00 to $62.00 and gave the stock a “neutral” rating in a report on Wednesday. Truist Financial upped their price target on CarMax from $50.00 to $60.00 and gave the stock a “hold” rating in a research note on Wednesday. Wall Street Zen raised shares of CarMax from a “sell” rating to a “hold” rating in a report on Saturday, June 13th. Finally, BNP Paribas Exane reiterated a “strong sell” rating and set a $48.00 price objective (up from $33.00) on shares of CarMax in a research report on Wednesday. Two investment analysts have rated the stock with a Buy rating, fourteen have issued a Hold rating and three have assigned a Sell rating to the company. According to data from MarketBeat.com, the company presently has a consensus rating of “Reduce” and a consensus target price of $56.71.

Check Out Our Latest Stock Report on CarMax CarMax Stock Up 1.5% The company’s 50-day simple moving average is $59.47 and its 200 day simple moving average is $50.40. The company has a debt-to-equity ratio of 2.66, a current ratio of 2.33 and a quick ratio of 0.82. The firm has a market cap of $7.94 billion, a P/E ratio of 27.29, a price-to-earnings-growth ratio of 1.75 and a beta of 1.23.

CarMax (NYSE:KMX – Get Free Report) last issued its quarterly earnings data on Tuesday, September 29th. The company reported $1.16 earnings per share for the quarter, topping the consensus estimate of $0.73 by $0.43. The company had revenue of $7.88 billion for the quarter, compared to analysts’ expectations of $7.09 billion. CarMax had a return on equity of 7.76% and a net margin of 1.06%.The firm’s revenue for the quarter was up 19.5% on a year-over-year basis. During the same period in the previous year, the firm posted $0.64 earnings per share. Research analysts anticipate that CarMax, Inc. will post 2.74 EPS for the current fiscal year.

Institutional Inflows and Outflows Several hedge funds and other institutional investors have recently bought and sold shares of KMX. State Street Corp lifted its holdings in shares of 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 buying an additional 271,216 shares during the period. Jupiter Topco LLC purchased a new position in shares of CarMax during the second quarter valued at $245,676,000. Janus Henderson Group PLC raised its holdings in shares of CarMax by 1.1% in the first quarter. Janus Henderson Group PLC now owns 4,580,807 shares of the company’s stock valued at $190,471,000 after acquiring an additional 49,987 shares in the last quarter. Primecap Management Co. CA bought a new stake in shares of CarMax in the second quarter valued at about $230,548,000. Finally, Dimensional Fund Advisors LP lifted its stake in CarMax by 7.3% in the first quarter. Dimensional Fund Advisors LP now owns 4,275,663 shares of the company’s stock worth $177,767,000 after acquiring an additional 289,768 shares during the period.

CarMax Company Profile (Get Free Report)

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.

Further Reading Five stocks we like better than CarMax Everyone in AI Is Quietly Copying Palantir’s Playbook Advanced Micro Devices Is Spending $8.2 Billion to Learn What AI Needs Next JPMorgan Bets on Genius Sports as the Market Loses Patience Apple’s $5.7 Billion Patent Verdict Raises a Bigger Royalty Question Receive News & Ratings for CarMax Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for CarMax and related companies with MarketBeat.com's FREE daily email newsletter.

Yesterday morning, before the market opened, CarMax (KMX -6.96%) reported impressive Q2 earnings, with revenue up 19.5% year-over-year (YOY) and earnings per share up a jaw-dropping 81.2%.

So it was unsurprising that the company's shares were up 4.7% yesterday. But today, the market suddenly seemed to sour on CarMax. Shares plummeted throughout the day, dropping 7% to close at $55.09, below its pre-earnings price.

What on earth happened? Is the company a buy at this price after its earnings report? Here's what investors need to know.

Image source: The Motley Fool.

CarMax's new strategyCarMax's earnings boost might seem counterintuitive given the company's strategy going into the quarter.

The company is led by new CEO Keith Barr, who is just six months into his tenure. Barr and his management team have focused on offering more competitive prices for CarMax's used vehicles by enhancing its pricing algorithms, and it appears they've succeeded.

CarMax sold more vehicles (or "units") than it did in the year-ago quarter, but recorded lower profits from those sales, as you'd expect. What you might not expect is that the average selling price of each vehicle increased.

On the retail side, unit sales were up 13.8%. Retail gross profit per unit was $2,105, a decrease of $111 (5%) from the prior-year quarter, reflecting more competitive pricing. But the average retail selling price per unit was $27,623, up $1,600 (6.3%) YOY. In other words, CarMax's sales prices went up, but the company trimmed its margins so it made less money per vehicle.

It was a similar story in CarMax's wholesale division, which sold 15.9% more units than in the year-ago quarter. Gross profit per unit dropped $135 (13.6%) to $858, but average wholesale selling price per unit increased by $145 (1.8%) to $8,036.

But those numbers, while a net positive, don't get you to an 81% increase in net income. Where did that come from?

Image source: Getty Images.

How CarMax boosted its earningsCarMax's impressive per-share earnings growth was driven by a series of smaller factors rather than a single big one. The 19.5% YOY revenue boost was one of those things, but there were many others.

Income from auto financing was up 32.1% to $135.6 million, as the company lowered its loan-loss provision by $29 million (20.3%). Meanwhile, the auto financing segment also recognized a $16.6 million gain on the sale of residual financial interests and increased servicing fees by $6.1 million.

Part of this was due to expansion into offering credit to "Tier 2" borrowers. These are borrowers with above-average credit profiles that are below the "prime" Tier 1 borrowers. Previously, CarMax handed these customers off to third-party lenders, but because such borrowers usually pay higher loan rates, CarMax generates more profits from them. CarMax financed 22% of its Tier 2 sales volume in Q2, up from just 10% in the year-ago quarter.

Extended protection plans and other service operations saw robust growth of 33.1%, boosting net income.

The company also managed to lower its selling, general, and administrative (SG&A) expenses across the business. Those expenses rose by only 4.6%, well below overall revenue growth.

Lastly, the company reduced its share count by 3.9% over the year, resulting in fewer outstanding shares and slightly boosting diluted earnings per share.

In other words, the business seems to be showing improvement across the board. Does that mean it's a buy?

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Although CarMax didn't offer any forward guidance, the same factors that helped it succeed in this quarter should continue to help it moving forward.

In particular, the Federal Trade Commission's recent enforcement of transparent pricing rules is now requiring all used car retailers to disclose all hidden fees upfront. CarMax has always done this, but now that its competitors are being forced to do so as well, it's benefiting from the level playing field. Management credits this rule change for boosting the company's comparable store sales.

The higher-interest rate environment and CarMax's expansion into Tier 2 lending should continue to boost income from its financing arm. Increased sales of extended protection plans and lower SG&A expenses should also benefit the bottom line in the long term.

In short, although CarMax's stock has been rocky since the sky-high used-vehicle price era ended, it looks like a much better buy now as a turnaround play.

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Carmax Inc (NYSE:KMX) on Tuesday reported better-than-expected second-quarter financial results.

CarMax reported adjusted earnings of $1.16 per share, beating the analyst estimate of 73 cents. Sales rose 19.5% year over year to $7.88 billion, beating the $6.98 billion estimate.

Retail used-vehicle sales rose 13.8% to 227,391 units, while comparable-store used-vehicle sales increased 13%. Retail revenue climbed 19.7%, helped by higher sales volume and a $1,600, or 6.3%, increase in the average selling price.

“Our strong second quarter results reflect solid execution and early progress against Shift into GEAR, our four-pillar strategy to strengthen CarMax’s core business and return the company to sustained growth,” said Keith Barr, President and Chief Executive Officer. “We delivered 81% EPS growth as we strengthened our price competitiveness, increased Extended Protection Plan margins, expanded CAF’s share of Tier 2 originations, continued to enhance our digital experience, and drove material SG&A leverage. I am confident in our ability to build on this early momentum. We have a clear strategy, a solid foundation, and an exceptional team accelerating our progress to create long-term value for our shareholders.”

CarMax shares fell 0.3% to $59.06 in pre-market trading.

These analysts made changes to their price targets on CarMax following earnings announcement.

B of A Securities analyst John Murphy maintained the stock with an Underperform rating and raised the price target from $45 to $50. BNP Paribas analyst Chris Bottiglieri reiterated the stock with an Underperform rating and raised the price target from $33 to $48. Considering buying KMX stock? Here’s what analysts think:

Photo via Shutterstock

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CarMax, Inc. (KMX) Q2 2027 Earnings Call September 29, 2026 8:00 AM EDT

Company Participants

David Lowenstein - Vice President of Investor Relations
Keith Barr - CEO, President & Director
Enrique Mayor-Mora - Executive VP, CFO & Principal Accounting Officer
Jon Daniels - Senior Vice President

Conference Call Participants

Daniela Haigian - Morgan Stanley, Research Division
Rajat Gupta - JPMorgan Chase & Co, Research Division
Jeffrey Lick - Stephens Inc., Research Division
Craig Kennison - Robert W. Baird & Co. Incorporated, Research Division
David Bellinger - Mizuho Securities USA LLC, Research Division
Joseph Spak - UBS Investment Bank, Research Division
John Babcock - Barclays Bank PLC, Research Division
Scot Ciccarelli - Truist Securities, Inc., Research Division
Alexander Perry - BofA Securities, Research Division
Christopher Pierce - Needham & Company, LLC, Research Division

Presentation

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Second Quarter Fiscal Year 2027 CarMax Earnings Release Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Lowenstein, VP, Investor Relations. Please go ahead.

David Lowenstein
Vice President of Investor Relations

Good morning. Thank you for joining our fiscal 2027 second quarter earnings conference call. I'm here today with Keith Barr, President and CEO; Enrique Mayor-Mora, Executive Vice President and CFO; and Jon Daniels, Executive Vice President, CarMax Auto Finance.

Let me remind you our statements today that are not statements of historical fact, including, but not limited to, statements regarding the company's future business plans, prospects and financial performance, are forward-looking statements we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on our current knowledge, expectations and assumptions and are subject to substantial risks and uncertainties that could cause actual results to differ materially from our expectations. In providing projections and other

This Single Factor Is Holding Back Carvana’s Disruptive EdgeCarMax NYSE: KMX reported fiscal 2027 second-quarter results marked by higher vehicle sales, expanded earnings and improving operating leverage, as the used-car retailer pointed to early benefits from its “Shift into GEAR” strategy.

President and CEO Keith Barr said used-vehicle comparable sales increased 13% during the quarter, while total used and wholesale vehicle units rose 15%. Diluted earnings per share increased 81% from a year earlier to $1.16.

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CarMax In Reverse? Why You Should Buy Now Before the Big Catalysts Emerge“Our strong second quarter results reflect solid execution and the initial benefits we are seeing as we deliver on the strategy,” Barr said. The company’s strategy centers on four priorities: improving its vehicle offering and pricing, simplifying the customer experience, adding value through products and financing, and operating more efficiently.

Sales Growth and Pricing Total sales rose 19% year over year to $7.9 billion, according to Executive Vice President and CFO Enrique Mayor-Mora. CarMax sold approximately 388,000 retail and wholesale vehicles during the quarter, up 15% from the prior-year period.

Avis, CarMax, and Carvana: 3 Car Stocks Sharply DivergeRetail used-unit comparable sales climbed 13%, and total used-unit sales rose 14%. Mayor-Mora attributed the retail performance primarily to more competitive pricing, cost-of-sales efficiencies and improved pricing capabilities. Average retail selling price increased $1,630 year over year to $27,623.

Wholesale unit sales rose 16%, while the average wholesale selling price increased $145 to $8,036. CarMax acquired roughly 310,000 vehicles during the quarter, up 6%. The company purchased about 262,000 vehicles directly from consumers, roughly flat from the prior year, and sourced approximately 48,000 vehicles from dealers through its Edmunds sales team, up 54%.

Management also cited increased Federal Trade Commission regulatory focus on transparent advertised vehicle pricing as a tailwind. Mayor-Mora said the company estimated that roughly half of its comparable-sales performance came from actions it directly controlled, such as pricing, cost efficiencies and customer-experience improvements, while the other half reflected the impact of FTC enforcement.

CarMax has historically emphasized no-haggle and transparent pricing. Barr said the share of its vehicles rated as “great deals” on Cars.com more than doubled compared with the same quarter a year earlier.

Margins, Expenses and Product Offerings Total gross profit increased 11% to $799 million. Used retail gross profit rose 8% to $479 million, driven by higher unit volume, though profit per used unit declined $111 year over year to $2,105.

The company said it is managing gross profit per unit, or GPU, more dynamically as it uses reconditioning efficiencies to support lower customer prices. Management now expects fiscal 2027 retail margins to decline by less than the previously projected $200 per retail vehicle versus fiscal 2026. However, executives said retail GPU is expected to be lower year over year in both the third and fourth quarters.

Wholesale vehicle gross profit was flat at $138 million, as higher volume was offset by a $135 decline in wholesale GPU to $858.

Other gross profit rose 33%, or $46 million, to $183 million. Extended Protection Plan margin dollars increased $27 million, aided by higher unit volume and a $46 per-unit increase in margins. CarMax said its redesigned protection products, including a wheel, tire and dent offering, have helped improve results. The company maintained its expectation for approximately $35 per unit of incremental EPP margin for the full fiscal year.

Second-quarter SG&A expenses increased 4.6% to $629 million, but SG&A expense per total unit declined $157, or 9%, to $1,621. The company said it remains on track to achieve $200 million in identified savings at its fiscal 2027 exit rate. It also expects approximately $6 million in severance expense during the third quarter from additional corporate cost-streamlining actions.

Auto Finance Performance CarMax Auto Finance, or CAF, generated $136 million in income, up 32% from a year earlier. The increase was driven in part by a $29 million decline in the loan-loss provision, a $17 million gain on sale and a $6 million increase in servicing fees, according to Executive Vice President of Auto Finance Jon Daniels.

CAF originated $2.3 billion during the quarter and had sales penetration of 40.9%, compared with 42.6% a year earlier. The weighted average contract rate for new customers was 11.8%, up 60 basis points.

The company continued to expand its lending presence in the Tier 2 credit segment. CAF financed 22% of Tier 2 volume during the quarter, compared with 10% a year earlier, and Daniels said observed credit performance in that segment remained in line with the company’s expectations.

Despite the Tier 2 growth, overall CAF penetration declined because of lower Tier 1 penetration. Daniels said higher funding costs led CAF to raise Tier 1 rates, where customers have more financing alternatives. CarMax expects CAF income for fiscal 2027 to be slightly below fiscal 2026 levels while it plans to originate nearly $1 billion in Tier 2 loans by year-end.

Capital Returns and Leadership Changes Following the quarter’s performance and its outlook for the remainder of the year, CarMax said it plans to resume share repurchases at a modest pace in the third quarter. The company had $1.31 billion remaining under its repurchase authorization at quarter-end.

CarMax also announced leadership additions intended to support its strategy. Elizabeth Dirgins will join the company effective Oct. 5 as executive vice president and chief digital and customer officer, a newly created position overseeing marketing, product and Edmunds. Jeff Campbell joined the senior leadership team in August as senior vice president of strategy, leading a centralized function for strategy, data science, artificial intelligence and pricing.

The company plans to provide further details on its strategic initiatives and milestones during a virtual strategic update scheduled for Nov. 3.

About CarMax (NYSE:KMX)CarMax, Inc is a specialty retailer of used vehicles and one of the largest automotive retailers in the United States. The company sells a broad selection of used cars, trucks and sport utility vehicles through its retail locations and online platform. CarMax also purchases vehicles from consumers and other sources, providing customers with a streamlined alternative to traditional private-party sales.

In addition to retail sales, CarMax operates wholesale vehicle auctions for vehicles that do not meet its retail standards or business requirements.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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CarMax (KMX - Free Report) reported $7.88 billion in revenue for the quarter ended August 2026, representing a year-over-year increase of 19.5%. EPS of $1.16 for the same period compares to $0.64 a year ago.

The reported revenue compares to the Zacks Consensus Estimate of $7.06 billion, representing a surprise of +11.54%. The company delivered an EPS surprise of +70.59%, with the consensus EPS estimate being $0.68.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.

Here is how CarMax performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

Average Selling Prices - Used vehicles: $27.62 thousand compared to the $26.27 thousand average estimate based on five analysts.Average Selling Prices - Wholesale vehicles: $8.04 thousand versus $7.93 thousand estimated by five analysts on average.Unit Sales - Used vehicles: 227,391 compared to the 214,644 average estimate based on five analysts.Gross Profit per Unit - Used vehicle: $2,105.00 versus $2,001.00 estimated by four analysts on average.Gross Profit per Unit - Wholesale vehicle: $858.00 compared to the $947.36 average estimate based on four analysts.Net sales and operating revenues- Wholesale vehicle: $1.36 billion versus $1.2 billion estimated by six analysts on average. Compared to the year-ago quarter, this number represents a +18.2% change.Other sales and revenues- Extended protection plan revenues: $141.6 million compared to the $134.86 million average estimate based on six analysts. The reported number represents a change of +23% year over year.Net sales and operating revenues- Used vehicle: $6.31 billion versus $5.7 billion estimated by six analysts on average. Compared to the year-ago quarter, this number represents a +19.7% change.Other sales and revenues- Third-party finance fees, net: $-1.8 million versus the six-analyst average estimate of $-1.99 million. The reported number represents a year-over-year change of +125%.Net sales and operating revenues- Other sales and revenues: $208.4 million compared to the $185.35 million average estimate based on six analysts. The reported number represents a change of +19.5% year over year.Other sales and revenues- Other: $32.3 million compared to the $21.07 million average estimate based on five analysts. The reported number represents a change of +45.5% year over year.Other sales and revenues- Advertising & subscription revenues: $36.3 million compared to the $38.23 million average estimate based on five analysts. The reported number represents a change of -4.2% year over year.View all Key Company Metrics for CarMax here>>>

Shares of CarMax have returned -7.8% over the past month versus the Zacks S&P 500 composite's -0.2% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.

CarMax logged higher profit and sales in the latest quarter, as the used-care retailer sold more vehicles at higher prices.

RICHMOND, Va.--(BUSINESS WIRE)--CarMax, Inc. (NYSE:KMX) today reported results for the second quarter ended August 31, 2026. Second Quarter Highlights:(1) Total net revenues rose 19.5% to $7.9 billion. Combined retail and wholesale unit sales of 387,735, an increase of 14.7%. Retail used unit sales increased 13.8% and comparable store used unit sales increased 13.0%; gross profit per retail used unit of $2,105 declined by $111, reflecting the continuation of pricing actions implemented to suppo.

This week will bring the September jobs report and data on personal consumption, manufacturing, and home prices. Carnival, Conagra, and Jefferies report earnings.

Wall Street expects a year-over-year increase in earnings on higher revenues when CarMax (KMX - Free Report) reports results for the quarter ended August 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The earnings report, which is expected to be released on September 29, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.

Zacks Consensus EstimateThis used car dealership chain is expected to post quarterly earnings of $0.66 per share in its upcoming report, which represents a year-over-year change of +3.1%.

Revenues are expected to be $7.05 billion, up 6.9% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 2.27% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for CarMax?For CarMax, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -6.67%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination makes it difficult to conclusively predict that CarMax will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that CarMax would post earnings of $0.94 per share when it actually produced earnings of $1.31, delivering a surprise of +39.36%.

Over the last four quarters, the company has beaten consensus EPS estimates three times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

CarMax doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

ET

Good morning, CFOs. The settlement of an antitrust lawsuit is clearing the way for a giant corporate deal that is poised to reshape Hollywood and the media and entertainment business.

Paramount reached a settlement with state attorneys general from a dozen states, including California and New York, removing a major hurdle to its megamerger with Warner Bros. Discovery, my colleagues Jessica Toonkel and Paul Kiernan report.

The settlement announced Monday stops short of forcing Paramount Chief Executive David Ellison to make significant structural changes to the company, but includes penalties such as the forced sale of cable channels and Paramount’s stake in Miramax if it doesn’t make good on its promises.

More background and context: The merger would bring two of the movie business’ oldest studios, two major streaming services in Paramount+ and HBO Max and dozens of television networks under one owner. It would also give David Ellison a vast entertainment empire that includes franchises such as Harry Potter, DC superheroes and “Game of Thrones,” as well as cable networks like CNN and Cartoon Network.

Two numbers stood out for me, the $81 billion size of the merger and the nearly $80 billion in debt that would result from the combined entity. So I asked our L.A. bureau chief Ryan Faughnder to help make sense of the deal. Ryan has been a longtime observer of Hollywood and previously was a senior editor with the Los Angeles Times’ Hollywood Inc. team, which covers the business of entertainment. The following is an edited, condensed version of our conversation.

How do analysts expect Ellison to manage this debt load? 

One of the most prominent media industry analysts has called the figure “staggering,” as my colleague Joe Flint wrote back in July. And it’s an issue hanging over a lot of David Ellison’s ambitions to make more movies, provide more content and so on. One thing that could help is the cash flow generated by its cable channels, which still make money even though that part of the industry is in decline. Ellison has also promised $6 billion in synergies from the merger, which could come from consolidating tech operations at the streaming services and by eliminating overlapping jobs. Paramount has told investors it will lower the debt ratio to three times annual Ebitda within three years. 

What are you watching most closely, in terms of longer term ramifications of this deal? 

Whether Ellison makes good on his promise of 30 movies a year combined from the studios he’ll own. Hollywood is skeptical, as our reporter Ben Fritz has noted, but that pledge has been central to Ellison’s pitch to the industry and now because of the settlement, he’s on the hook for financial penalties—about $30 million for every movie he comes up short. 

What does this mean for the media and entertainment industry? 

Paramount has committed to $1.5 billion more in domestic entertainment production over the next five years, which California Attorney General Rob Bonta has called a big win. Many people who work in entertainment are still worried that this merger will further imperil Hollywood jobs, which have already been diminished because of Covid, the writers and actors strikes of 2023 and studios moving productions out of the country in pursuit of government incentives. But also, the settlement at least removes some uncertainty. Without it, the case was set to drag on through March.

The Day Ahead📆 Earnings

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What Else Matters to CFOsJust as global leaders convene this week for the United Nations General Assembly, OpenAI is asking the U.S. government to lead an effort with other countries to develop global artificial-intelligence safety and security standards.

Countries worldwide should set common measures for evaluating forthcoming self-improving AI systems and establish secure channels to share emerging threats, OpenAI said in a proposal published Monday.

The U.S. Center for AI Standards and Innovation could work with the emerging network of AI safety institutes around the world—such as existing groups in the U.K., France, and Singapore—to create the standards, the company said.

British Columbia Sues OpenAI, Alleging ChatGPT Aided Mass School ShootingThe Magnificent Seven Is Roaring Back, Fueled by Meta’s RallyShopify to Use Meta’s Muse for Agentic Checkout***

An equipment outage snarled air travel across the Northeast on Monday, significantly delaying passengers and diverting flights. 

Flights at Newark Liberty International, John F. Kennedy International and LaGuardia airports began to stack up after a contractor apparently accidentally cut 600 feet of fiber communications line in New Jersey, Federal Aviation Administration chief Bryan Bedford said.

Around 90 flights had been diverted because of the outage, he said early Monday afternoon, and delays compounded at Newark and Philadelphia—the hardest-hit airports—with spillover disruptions at the other New York City airports and Boston.

📰 Other headlines

CarMax Cuts Jobs for Third Time in 12 Months Amid Soft Auto MarketEthan Allen Launches Search for Next Chief ExecutiveHow Harley-Davidson, an American Icon, Became a Tariff Punching BagExclusive: Private-Equity Firms Buy Indie-Author Publisher Podium for More Than $400 MillionWorried Republicans Back Ideas to Lower Diesel, Gas Prices Before MidtermsTelevision Networks Suspend Some Coverage of Trump After BansSilver Lake Takes On Carl Icahn and All of Merger Arbitrage in Endeavor Fight📈 Earnings wrapup

Societe Generale Shares Climb After Bank Raises Profitability TargetFor more earnings news, click here.

Quotable“The expertise you have today may be obsolete tomorrow.”

— Adam Grant, the bestselling author and organizational psychologist at the University of Pennsylvania’s Wharton School. “Great careers used to hinge on ability, and now they depend on agility,” he also said in an interview with The Wall Street Journal. 

The WSJ CFO & COO CouncilThe WSJ CFO & COO Council convenes the world’s top financial leaders so they can gain perspective on navigating market uncertainty, aligning priorities and making decisions that deliver measurable results. Join this trusted community where CFOs and COOs exchange approaches, access strategic insights and continuously sharpen their influence across the enterprise.

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CFO MovesAvantor, the Radnor, Penn.-based provider of products and services to the life-sciences and advanced-technology industries, has hired Todd Garner as its new executive vice president and CFO. Garner previously served as executive vice president and finance chief of Conmed, which announced his planned departure earlier this year. The company said Steve Eck, who has been serving as interim chief financial officer since R. Brent Jones left in June to take another position, will continue as chief accounting officer.

—Colin Kellaher contributed to today’s Ledger.

About UsThe WSJ Leadership Institute’s CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy.

Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Jennifer Williams and Bureau Chief Walden Siew.

You can reach us by replying to any newsletter, or email Walden at [email protected].

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The nation's largest used-car retailer slashed 145 white-collar jobs, about 4% of its corporate staff, as part of a turnaround plan.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.

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Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

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How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

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Stock to Watch: CarMax (KMX - Free Report) CarMax, Inc. is the largest retailer of used vehicles in the United States. In fiscal 2026 (ended Feb. 28, 2026), the company sold approximately 781,000 used vehicles at retail. It is also one of the nation’s largest operators of wholesale vehicle auctions, with roughly 538,000 vehicles sold in fiscal 2026.

KMX is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 22.58; value investors should take notice.

One analyst revised their earnings estimate higher in the last 60 days for fiscal 2027, while the Zacks Consensus Estimate has increased $0.03 to $2.73 per share. KMX also boasts an average earnings surprise of +28.9%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, KMX should be on investors' short list.

NEW YORK, Sept. 02, 2026 (GLOBE NEWSWIRE) -- Bernstein Liebhard LLP, a nationally recognized investor rights law firm, announces that it is investigating potential breaches of fiduciary duty by certain directors and officers of CarMax, Inc. (“CarMax” or the “Company”) (NYSE: KMX). The investigation seeks to determine whether the Company’s leadership fulfilled its obligations to shareholders and whether legal remedies may be available.

Current CarMax Shareholders Are Encouraged to Contact the Firm

Do you currently own shares of CarMax, Inc. (NYSE: KMX)?Did you purchase your shares before June 20, 2025?Would you like to learn more about your legal rights as a shareholder?
Why Is Bernstein Liebhard Investigating?

Bernstein Liebhard is investigating whether certain directors and officers of CarMax breached the fiduciary duties they owed to the Company and its shareholders. The investigation is focused on determining whether Company leadership acted in the best interests of shareholders and whether additional legal action may be appropriate based on publicly available information.

What Shareholders Should Do

If you currently own CarMax stock and would like to discuss your legal rights or obtain additional information regarding the investigation, please visit the firm’s CarMax Shareholder Investigation page or contact Investor Relations Manager Peter Allocco at (212) 951-2030 or [email protected] for a confidential consultation.

About Bernstein Liebhard LLP

For more than three decades, Bernstein Liebhard LLP has represented investors in complex securities and shareholder litigation. Since 1993, the firm has recovered more than $3.5 billion for its clients and has been retained by many of the nation’s largest public and private pension funds to monitor investments and pursue claims on behalf of investors.

The firm’s accomplishments include recognition on The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and inclusion in The Legal 500 for sixteen consecutive years, reflecting its longstanding commitment to protecting shareholder rights.

ATTORNEY ADVERTISING. Prior results do not guarantee or predict a similar outcome with respect to any future matter.

Contact:

Peter Allocco
Investor Relations Manager
Bernstein Liebhard LLP
10 East 40th Street
New York, NY 10016
Phone: (212) 951-2030
Website: https://www.bernlieb.com
Email: [email protected]

Connor Clark & Lunn Investment Management Ltd. acquired a new position in CarMax, Inc. (NYSE:KMX – Free Report) in the second quarter, according to the company in its most recent filing with the SEC. The firm acquired 24,880 shares of the company’s stock, valued at approximately $1,316,000.

A number of other institutional investors and hedge funds have also modified their holdings of KMX. Kiltearn Partners LLP acquired a new position in shares of CarMax in the second quarter valued at $21,499,000. Northwestern Mutual Wealth Management Co. acquired a new stake in CarMax during the second quarter worth $187,000. Quantbot Technologies LP bought a new stake in CarMax in the 2nd quarter valued at $598,000. Evolve Private Wealth LLC bought a new stake in CarMax in the 2nd quarter valued at $702,000. Finally, Landscape Capital Management L.L.C. acquired a new position in shares of CarMax in the 2nd quarter valued at $8,181,000.

Insiders Place Their Bets In other CarMax news, Director Peter J. Bensen bought 2,500 shares of the firm’s stock in a transaction dated Monday, June 22nd. The shares were bought at an average price of $52.20 per share, for a total transaction of $130,500.00. Following the completion of the acquisition, the director owned 24,796 shares of the company’s stock, valued at approximately $1,294,351.20. This trade represents a 11.21% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, Director Sona Chawla bought 2,000 shares of the stock in a transaction dated Thursday, June 25th. The stock was acquired at an average price of $53.39 per share, with a total value of $106,780.00. Following the completion of the purchase, the director owned 21,702 shares of the company’s stock, valued at $1,158,669.78. This represents a 10.15% increase in their position. The disclosure for this purchase is available in the SEC filing. Over the last quarter, insiders have acquired 13,900 shares of company stock valued at $735,574. 1.01% of the stock is currently owned by corporate insiders.

Analysts Set New Price Targets Several analysts have recently weighed in on KMX shares. Royal Bank Of Canada lifted their target price on shares of CarMax from $41.00 to $45.00 and gave the company a “sector perform” rating in a research report on Thursday, June 18th. Zacks Research raised shares of CarMax from a “hold” rating to a “strong-buy” rating in a research report on Tuesday, August 11th. Truist Financial raised their price target on shares of CarMax from $47.00 to $50.00 and gave the stock a “hold” rating in a research note on Thursday, June 18th. JPMorgan Chase & Co. raised CarMax from an “underweight” rating to a “neutral” rating and lifted their price objective for the company from $38.00 to $60.00 in a report on Wednesday, July 29th. Finally, Bank of America upped their price objective on CarMax from $40.00 to $45.00 and gave the company an “underperform” rating in a research note on Wednesday, June 17th. One equities research analyst has rated the stock with a Strong Buy rating, two have given a Buy rating, fourteen have issued a Hold rating and three have assigned a Sell rating to the company. Based on data from MarketBeat, the stock presently has an average rating of “Hold” and a consensus target price of $51.00. Read Our Latest Analysis on CarMax

CarMax Price Performance Shares of CarMax stock opened at $61.96 on Monday. 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 stock has a market capitalization of $8.79 billion, a price-to-earnings ratio of 40.50, a P/E/G ratio of 2.84 and a beta of 1.15. CarMax, Inc. has a 1-year low of $30.26 and a 1-year high of $65.28. The firm’s 50-day moving average price is $56.79 and its two-hundred day moving average price is $47.59.

CarMax (NYSE:KMX – Get Free Report) last announced its earnings results on Wednesday, June 17th. The company reported $1.31 EPS for the quarter, topping the consensus estimate of $0.96 by $0.35. The business had revenue of $8.01 billion for the quarter, compared to the consensus estimate of $7.42 billion. CarMax had a return on equity of 6.64% and a net margin of 0.84%.CarMax’s revenue was up 6.2% compared to the same quarter last year. During the same period in the previous year, the business earned $1.38 EPS. On average, equities analysts predict that CarMax, Inc. will post 2.73 earnings per share for the current fiscal year.

CarMax Profile (Free Report)

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.

Read More Five stocks we like better than CarMax Strike a Balance Between Growth and Stability With These 3 Names Ready to Rally Rubrik’s AI Security Bet Could Power the Next Leg Higher Apple’s Foldable iPhone Could Be a Catalyst, But Not a Cure-All Snowflake Is Up Nearly 50% in 2026—What Are Short Sellers Betting Against?

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CarMax, Inc. (NYSE:KMX – Get Free Report) has earned an average recommendation of “Hold” from the twenty analysts that are presently covering the stock, MarketBeat Ratings reports. Three investment analysts have rated the stock with a sell rating, fourteen have given a hold rating, two have assigned a buy rating and one has assigned a strong buy rating to the company. The average twelve-month price objective among brokers that have covered the stock in the last year is $51.00.

A number of analysts have recently weighed in on the stock. Stephens upgraded shares of CarMax from an “equal weight” rating to an “overweight” rating and set a $66.00 price objective on the stock in a research note on Thursday, June 18th. Morgan Stanley boosted their target price on shares of CarMax from $35.00 to $44.00 and gave the company an “equal weight” rating in a research report on Tuesday, June 23rd. Royal Bank Of Canada upped their price target on shares of CarMax from $41.00 to $45.00 and gave the company a “sector perform” rating in a report on Thursday, June 18th. UBS Group set a $60.00 price target on CarMax in a research report on Wednesday, July 29th. Finally, Robert W. Baird boosted their price objective on CarMax from $48.00 to $55.00 and gave the company an “outperform” rating in a report on Thursday, June 18th.

Get Our Latest Stock Report on CarMax

Insider Buying and Selling In related news, Director Peter J. Bensen purchased 2,500 shares of the business’s stock in a transaction that occurred on Monday, June 22nd. The stock was bought at an average price of $52.20 per share, with a total value of $130,500.00. Following the acquisition, the director owned 24,796 shares in the company, valued at $1,294,351.20. The trade was a 11.21% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CEO Keith Barr acquired 9,400 shares of CarMax stock in a transaction on Monday, June 22nd. The shares were bought at an average price of $53.01 per share, with a total value of $498,294.00. Following the completion of the transaction, the chief executive officer directly owned 33,375 shares of the company’s stock, valued at $1,769,208.75. This trade represents a 39.21% increase in their position. The disclosure for this purchase is available in the SEC filing. In the last 90 days, insiders acquired 13,900 shares of company stock valued at $735,574. 1.01% of the stock is owned by company insiders. Institutional Trading of CarMax Several institutional investors have recently modified their holdings of KMX. Corient Private Wealth LP increased its stake in shares of CarMax by 19.2% during the second quarter. Corient Private Wealth LP now owns 67,136 shares of the company’s stock worth $3,551,000 after purchasing an additional 10,811 shares in the last quarter. Amundi lifted its stake in CarMax by 38.4% in the 2nd quarter. Amundi now owns 41,425 shares of the company’s stock valued at $2,191,000 after buying an additional 11,484 shares in the last quarter. VIRGINIA RETIREMENT SYSTEMS ET Al purchased a new position in CarMax in the 2nd quarter valued at about $1,550,000. California State Teachers Retirement System boosted its holdings in CarMax by 4,934.8% in the 2nd quarter. California State Teachers Retirement System now owns 8,253,061 shares of the company’s stock worth $436,504,000 after buying an additional 8,089,141 shares during the last quarter. Finally, iSAM Funds UK Ltd acquired a new stake in CarMax in the 2nd quarter worth about $222,000.

CarMax Trading Down 0.2% Shares of NYSE:KMX opened at $61.96 on Friday. The company has a quick ratio of 0.82, a current ratio of 2.70 and a debt-to-equity ratio of 2.87. CarMax has a 52-week low of $30.26 and a 52-week high of $65.28. The stock has a market cap of $8.79 billion, a price-to-earnings ratio of 40.50, a PEG ratio of 2.84 and a beta of 1.15. The business has a 50-day moving average price of $56.79 and a 200-day moving average price of $47.59.

CarMax (NYSE:KMX – Get Free Report) last issued its earnings results on Wednesday, June 17th. The company reported $1.31 EPS for the quarter, beating analysts’ consensus estimates of $0.96 by $0.35. CarMax had a return on equity of 6.64% and a net margin of 0.84%.The firm had revenue of $8.01 billion for the quarter, compared to analyst estimates of $7.42 billion. During the same quarter in the prior year, the firm earned $1.38 earnings per share. CarMax’s revenue for the quarter was up 6.2% on a year-over-year basis. Equities analysts predict that CarMax will post 2.73 EPS for the current year.

CarMax Company Profile (Get Free Report)

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.

Further Reading Five stocks we like better than CarMax Strike a Balance Between Growth and Stability With These 3 Names Ready to Rally Rubrik’s AI Security Bet Could Power the Next Leg Higher Apple’s Foldable iPhone Could Be a Catalyst, But Not a Cure-All Snowflake Is Up Nearly 50% in 2026—What Are Short Sellers Betting Against?

Receive News & Ratings for CarMax Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for CarMax and related companies with MarketBeat.com's FREE daily email newsletter.

RICHMOND, VA, Aug. 25, 2026 (GLOBE NEWSWIRE) -- As the first members of Gen Alpha turn 16, they're approaching one of life's biggest milestones: getting a driver's license. With student parking lots across the country starting to feature more and more of the eldest members of this new generation of drivers, CarMax, Inc. (NYSE: KMX), the nation's largest retailer of used cars, commissioned new research to better understand how they are navigating that milestone and what they and their families have in mind when shopping for a car.

The findings reveal they are eager to get behind the wheel. Unlike widely reported trends among Gen Z, who delayed getting their licenses and expressed greater ambivalence toward driving, this next generation of drivers is telling a different story. Gen Alpha is widely reported to have begun in 2010, and CarMax found that four in five Gen Alpha teens ages 14-16 (80%) either already have their license or plan to get it as soon as they are legally allowed to, while more than two-thirds (68%) say they are excited about the idea of driving.

For many of the teens surveyed, driving is about more than just transportation. Among those who already have their license or plan to get one, three-quarters (75%) view getting a driver's license as a major life milestone. The excitement is largely fueled by the independence that comes with driving, with teens most looking forward to being able to go wherever they want, whenever they want (33%) and no longer relying on parents for rides (31%).

But perhaps the biggest surprise is how many Gen Alpha teens think they’ll be getting a car after getting their license and how they want to shop for it. The survey found that 95 percent of these teens who already have their license or plan to get it expect to have access to a vehicle right away, with 40 percent of them expecting their family will purchase a vehicle for them to drive. And despite being the first generation raised entirely in a digital-first world, the overwhelming majority (86%) say it's important to see, sit in and test drive a vehicle before their family makes a purchase decision.

"After years of hearing about Gen Z delaying getting their license, we wanted to understand how that trend could play out as the oldest members of Gen Alpha reach driving age,” said Corey Haire, Vice President of Regional Sales at CarMax. “Contrary to Gen Z, we found that the next generation of drivers are eager to get behind the wheel and have the freedom to explore new places, connect with others, and gain a greater sense of independence. With the ability to compare options, take a test drive and learn from knowledgeable associates, CarMax is uniquely positioned to support families during the moments that matter most in their lives, like getting your first car.”

By the Numbers: Gen Alpha's Road to Independence

Gen Alpha Is Ready to Drive

80% already have their license or plan to get it as soon as legally allowedOnly 2% don’t plan to get a driver's license at all68% are excited about driving26% admit they're nervous about getting behind the wheel Driving Represents Freedom
According to those who already have their driver's license or plan to get it:

75% view getting a driver's license as a major life milestone33% are most excited about being able to go wherever they want, whenever they want31% can't wait to stop relying on parents for rides Design and Drive Lead the Way

37% are most excited about how a car looks30% prioritize how it drives13% prioritize fuel efficiencyJust 11% prioritize features like touchscreens and sound systemsOnly 8% prioritize driver-assistance technology From License to Driver’s Seat
According to those who already have their driver's license or plan to get it:

95% expect to have access to a vehicle as soon as they get their license40% expect their family will purchase a vehicle for them to drive28% expect to receive a hand-me-down25% expect to share a family vehicle Digital Natives Still Want an In-Person Experience

86% say it's important to see, sit in and test drive a vehicle before a purchase decision is madeIncluding 48% who say it's very importantJust 14% say it isn't important Helping Families Navigate the First-Car Journey with Confidence

As Gen Alpha approaches driving age, families are making decisions that blend emotion with practicality. While parents typically prioritize factors like affordability and reliability, a pattern CarMax often hears from families, survey results show teens are thinking about freedom and independence.

While Gen Alpha is the first generation to be born entirely in a digital-first world, never knowing life without the internet at their fingertips, the survey suggests they are not looking for a fully online path to car shopping. When evaluating qualities like how a vehicle looks and feels on the road, the majority still values the hands-on experiences that come from seeing a vehicle up close and taking it for a test drive. For digitally-native teens and their families, the path to a first car may start online but doesn’t end there. The convenience of researching cars online paired with the confidence that comes from being able to compare options in person allows them and their families to drive away feeling like they found the right car.

At CarMax, families don’t have to choose between shopping online or in-store; they get the best of both. Teens can start exploring online to find a car that excites them with the ability to experience what they value most in person: how the car looks and drives. At the same time, parents can feel confident that the priorities they most often discuss with CarMax associates, including affordability, reliability and long-term value, remain at the center of the decision-making process. CarMax helps families shop with confidence and focus on finding the right fit, with tens of thousands of vehicles across most makes, models and price points, upfront no-haggle pricing, more than 25,000 vehicles priced under $25,000, and every vehicle being CarMax Certified quality and backed by a 10-Day Money-Back Guarantee and a 30-day limited warranty.

"We know that Gen Alpha teens feel that getting their driver’s license is a major life milestone. Families should treat it like one by making the car shopping experience feel like an exciting new chapter,” Haire continued. “At CarMax, families can browse tens of thousands of vehicles from the comfort of their couch, then come in to sit in and test drive the ones that excite them most. And with upfront pricing and knowledgeable support along the way, both teens and their parents can focus on finding the right car they can count on."

For more advice and guidance, CarMax associates shared tips to help parents and teens navigate the first-car journey with greater clarity and confidence: https://www.carmax.com/articles/gen-alpha-first-car-survey-2026

Survey Methodology
The CarMax Survey was conducted by Wakefield Research among 1,000 U.S. Teens Ages 14 to 16, between July 17th and July 29th, 2026, using an email invitation and an online survey. The data has been weighted.

About CarMax
CarMax, the nation's largest retailer of used autos, has earned customers' trust for more than 30 years by leading with integrity, transparency and honesty. CarMax continues to redefine car buying and selling for millions of customers, delivering the easy and confident experience they love. CarMax has more than 255 store locations, approximately 28,000 associates, and is proud to have been recognized for 22 consecutive years as one of the Fortune 100 Best Companies to Work For®. During the fiscal year that ended February 28, 2026, CarMax sold approximately 780,000 used vehicles and 540,000 wholesale vehicles at its auctions. In addition, CarMax Auto Finance originated $8 billion in auto loans during fiscal 2026, adding to its $16 billion portfolio. CarMax is committed to helping its communities thrive and reducing the environmental footprint of its operations. Learn more in the 2026 Responsibility Report. For more information, visit www.carmax.com.

Biglari Capital CORP. purchased a new stake in CarMax, Inc. (NYSE: KMX) in the undefined quarter, according to its most recent filing with the SEC. The fund purchased 125,420 shares of the company's stock, valued at approximately $6,633,464,000. CarMax comprises about 0.6% of Biglari Capital CORP.'s portfolio, making the stock its 6th largest