CarMax (NYSE:KMX) Shares Gap Down - Time to Sell?

Key Points

• CarMax shares gapped down premarket and were trading down about 14.9% (opened at $44.17 from $49.08 and last near $42) on heavy volume as investors reacted to the quarter.
• The company beat on adjusted results—$0.34 vs. $0.18 consensus and roughly $5.95B revenue—but posted a GAAP loss after a ~$141.3M goodwill impairment, and said price cuts amid weak used‑car demand compressed vehicle margins.
• Analyst sentiment is mixed-to-negative with a consensus rating of "Reduce" and an average price target around $39.93, as several firms trimmed targets and activist scrutiny adds volatility.

CarMax, Inc. (NYSE:KMX - Get Free Report)'s stock price gapped down before the market opened on Tuesday . The stock had previously closed at $49.08, but opened at $44.17. CarMax shares last traded at $42.0240, with a volume of 3,053,815 shares traded.

Trending Headlines about CarMax

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: Adjusted earnings and revenue beat: CarMax reported non‑GAAP EPS of $0.34 (above consensus) and revenue of about $5.95B, showing an operational beat vs. expectations. CarMax Press Release
• Neutral Sentiment: Leadership change: Keith Barr was named President & CEO effective March 16, 2026 — a material governance update that could shape turnaround execution but is still early in its impact. Business Wire: Q4 and FY26 Results
• Negative Sentiment: GAAP loss driven by goodwill impairment: Management took a ~$141.3M goodwill charge that pushed CarMax to a GAAP quarterly loss, a headline item prompting investor selling. Reuters: CarMax posts quarterly loss
• Negative Sentiment: Margin pressure from price cuts and weaker used‑car demand: CarMax cut prices to stimulate demand; gross profit per retail used unit declined and vehicle margins tightened, leaving investors worried about sustainability of margins and near‑term profits. WSJ: CarMax Swings to Loss
• Negative Sentiment: Market reaction and activist backdrop: Pre‑market and early trading saw sharp share declines (~6%+ intraday initial drops) as investors weighed the impairment, price‑cut strategy and activist investor scrutiny — amplifying volatility. Blockonomi: Stock tumbles despite beats

Analyst Ratings Changes

KMX has been the subject of a number of research reports. Mizuho decreased their price objective on CarMax from $46.00 to $36.00 and set a "neutral" rating for the company in a report on Friday, December 19th. Robert W. Baird boosted their price target on CarMax from $44.00 to $48.00 and gave the stock an "outperform" rating in a research report on Wednesday, February 18th. JPMorgan Chase & Co. lowered their price target on CarMax from $30.00 to $28.00 and set an "underweight" rating on the stock in a research report on Friday, December 19th. Weiss Ratings reaffirmed a "sell (d)" rating on shares of CarMax in a research report on Wednesday, April 8th. Finally, Stephens boosted their price target on CarMax from $39.00 to $43.00 and gave the stock an "equal weight" rating in a research report on Thursday, April 2nd. One investment analyst has rated the stock with a Buy rating, twelve have assigned a Hold rating and five have given a Sell rating to the stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Reduce" and a consensus price target of $39.93.

CarMax Trading Down 14.9%

The business has a 50 day moving average of $43.07 and a two-hundred day moving average of $42.00. The company has a current ratio of 1.99, a quick ratio of 0.51 and a debt-to-equity ratio of 2.74. The firm has a market cap of $5.92 billion, a P/E ratio of 13.77, a PEG ratio of 1.23 and a beta of 1.30.

CarMax (NYSE:KMX - Get Free Report) last posted its quarterly earnings results on Tuesday, April 14th. The company reported $0.34 earnings per share for the quarter, beating analysts' consensus estimates of $0.18 by $0.16. CarMax had a return on equity of 7.72% and a net margin of 1.77%.During the same period in the previous year, the firm posted $0.58 EPS. The company's revenue for the quarter was down 1.0% compared to the same quarter last year. Analysts predict that CarMax, Inc. will post 3.23 earnings per share for the current year.

Institutional Investors Weigh In On CarMax

A number of large investors have recently added to or reduced their stakes in KMX. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its stake in CarMax by 0.6% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 31,389 shares of the company's stock valued at $2,446,000 after acquiring an additional 173 shares during the period. Jones Financial Companies Lllp boosted its stake in CarMax by 3.1% in the 1st quarter. Jones Financial Companies Lllp now owns 5,372 shares of the company's stock valued at $419,000 after purchasing an additional 161 shares during the period. Empowered Funds LLC boosted its stake in CarMax by 12.5% in the 1st quarter. Empowered Funds LLC now owns 5,273 shares of the company's stock valued at $411,000 after purchasing an additional 585 shares during the period. Intech Investment Management LLC boosted its stake in CarMax by 61.7% in the 1st quarter. Intech Investment Management LLC now owns 19,143 shares of the company's stock valued at $1,492,000 after purchasing an additional 7,307 shares during the period. Finally, Acadian Asset Management LLC bought a new stake in CarMax in the 1st quarter valued at $727,000.

CarMax Company Profile

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.

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