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CarMax Inc (KMX) stock analysis

KMXNYSERetail-Auto Dealers & Gasoline StationsFiscal year ends February 28
Financials through Q2 FY2027, quarter ended Aug 31, 2026Last filing: 10-Q on Sep 30, 2026Score 4/3043% above fair value
$52.58−1.31 (-2.43%)

Close on Nov 12, 2026Market cap $7.46BP/E 25.6Yield –

StockData Score

Prices as of Nov 11, 2026How the score works

Value0Growth2Performance0Health2Dividend0

Weak4 of 30 checks passed

CarMax passes 4 of the 30 checks behind our score; 12 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.

Valuation
0/6
Growth
2/6
Past performance
0/6
Financial health
2/6
Dividend
0/6

What stands out

  • Debt covered by cash flow

    Operating cash flow over the last twelve months equals 271% of total debt.

  • Guidance raised

    CarMax raised its end of fiscal year 2027 targeted SG&A reductions outlook on Apr 14, 2026.

  • Growing faster than the industry

    Revenue grew 4.8% over the last twelve months; the Retail-auto dealers & gasoline stations median is 1.5%.

  • Short-term assets cover short-term debts

    Current assets are 2.33 times current liabilities.

What to watch

  • Margin of safety under 20%

    The price is 42.9% above fair value, so there is no margin of safety.

  • Trading above fair value

    The share price of $53.89 is above our fair value estimate of $37.71.

  • Earnings shrank over 5 years

    Net income shrank 19.8% a year on average over the last five fiscal years.

  • Revenue growing under 10% a year

    Revenue grew -4.5% a year over the last three fiscal years, short of the 10% we look for.

Valuation0/6

  • P/E above its 5-year median

    CarMax's P/E of 26.3 is above its own 5-year median of 22.2.

  • P/E above the industry

    CarMax's P/E of 26.3 is above the Retail-auto dealers & gasoline stations median of 12.5.

  • EV/EBITDA against its history

    Needs positive EBITDA and price history.

  • P/S above the industry

    CarMax's price-to-sales of 0.28 is above the Retail-auto dealers & gasoline stations median of 0.28 (book value is negative, so we use sales).

  • Trading above fair value

    The share price of $53.89 is above our fair value estimate of $37.71.

  • Margin of safety under 20%

    The price is 42.9% above fair value, so there is no margin of safety.

Growth2/6

  • Revenue growing under 10% a year

    Revenue grew -4.5% a year over the last three fiscal years, short of the 10% we look for.

  • EPS growing under 10% a year

    Diluted EPS grew -17.8% a year over the last three fiscal years.

  • Earnings growth not accelerating

    Net income grew -43.9% over the last twelve months, against a 5-year average of -19.8% a year.

  • Growing faster than the industry

    Revenue grew 4.8% over the last twelve months; the Retail-auto dealers & gasoline stations median is 1.5%.

  • Guidance raised

    CarMax raised its end of fiscal year 2027 targeted SG&A reductions outlook on Apr 14, 2026.

  • Gross margin slipping

    Gross margin was 10.3% over the last twelve months, against 11.2% a year earlier.

Past performance0/6

  • Return on equity

    Needs positive equity and five years of results.

  • Return on invested capital

    Needs operating income and invested capital.

  • Return on equity against the industry

    Needs positive equity.

  • Earnings shrank over 5 years

    Net income shrank 19.8% a year on average over the last five fiscal years.

  • Net margin below its 5-year average

    Net margin was 1.1% over the last twelve months, against a 5-year average of 2.0%.

  • Net margin below the industry

    CarMax's net margin of 1.1% is below the Retail-auto dealers & gasoline stations median of 2.6%.

Financial health2/6

  • Debt level

    Needs debt and equity figures.

  • Debt trend

    Needs a balance sheet from five years ago with positive equity.

  • Debt covered by cash flow

    Operating cash flow over the last twelve months equals 271% of total debt.

  • Interest coverage

    Interest expense is not reported separately.

  • Short-term assets cover short-term debts

    Current assets are 2.33 times current liabilities.

  • Elevated bankruptcy risk

    The Altman Z-score is 1.66; above 3 is the safe zone and below 1.8 the distress zone.

Dividend0/6

  • No dividend

    CarMax has not paid a dividend in the last twelve months.

  • Yield against Treasuries

    No dividend.

  • Yield against the market

    No dividend.

  • Dividend stability

    No dividend.

  • Earnings cover

    No dividend.

  • Cash-flow cover

    No dividend.

Scores of similar companies

Fair value

How we estimate it

Our estimate per share

$37.71

The share price is 43% above this estimate.

20%+ below
Near fair value
20%+ above
$53.89Price$37.71Fair value
MethodMultiple usedOwn 5Y medianIndustry medianValue per shareWeight
P/E17.4×22.2×12.5×$35.5973%
Earnings power10.6% cost of equity––$43.3827%
Fair value$37.71100%

Valuation over time

Using the earnings and balance sheet published at each date, not today's.

  • P/E at month end
  • Own 5-year median 22.2
  • Retail-auto dealers & gasoline stations median 12.5

An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.

Market risk

From the past year of daily prices.

Liquidity

Low risk

Average value traded per day
$143.67M
Value traded per 1% price move
$64.81M

Downside

Medium risk

Typical loss in a bad month
15.0%
Volatility (annualized)
47%
Sharpe ratio, 1 year
1.24
Beta to the S&P 500 (5Y)
1.15

Typical bad-month loss, week by week

25%: high

Margins

Share of revenue, fiscal years 2012 to 2026

Gross margin

10.8%−1.7 pts over 5 years

Net margin

1.0%−3.0 pts over 5 years

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