CarMax (NYSE:KMX) Releases Earnings Results, Beats Expectations By $0.43 EPS

Key Points

• CarMax significantly beat quarterly expectations: EPS was $1.16 versus the $0.73 consensus, while revenue reached $7.88 billion compared with estimates of $7.09 billion.
• Fiscal second-quarter revenue rose 19.5% to about $7.9 billion, supported by a 14.7% increase in combined retail and wholesale unit sales and 13.0% growth in comparable-store used-vehicle sales.
• Margin pressure remains a concern: Gross profit per retail used vehicle fell $111 to $2,105. Analysts maintain a largely cautious stance, with an average “Reduce” rating and a $53.15 consensus price target.

CarMax (NYSE:KMX - Get Free Report) announced its quarterly earnings data on Tuesday. The company reported $1.16 EPS for the quarter, beating analysts' consensus estimates of $0.73 by $0.43, FiscalAI reports. The company had revenue of $7.88 billion for the quarter, compared to the consensus estimate of $7.09 billion. CarMax had a net margin of 0.84% and a return on equity of 6.64%.

CarMax Price Performance

Shares of KMX stock opened at $56.31 on Tuesday. CarMax has a twelve month low of $30.26 and a twelve month high of $65.28. The business has a fifty day simple moving average of $59.52 and a 200 day simple moving average of $50.08. The company has a quick ratio of 0.82, a current ratio of 2.70 and a debt-to-equity ratio of 2.87. The company has a market cap of $7.99 billion, a P/E ratio of 36.80, a P/E/G ratio of 2.62 and a beta of 1.17.

Analysts Set New Price Targets

A number of brokerages have weighed in on KMX. Bank of America increased their target price on shares of CarMax from $40.00 to $45.00 and gave the stock an "underperform" rating in a report on Wednesday, June 17th. Morgan Stanley increased their price objective on CarMax from $44.00 to $47.00 and gave the stock a "cautious" rating in a research note on Wednesday, September 23rd. Mizuho raised their price objective on shares of CarMax from $38.00 to $43.00 and gave the company a "neutral" rating in a research report on Thursday, June 18th. Truist Financial lifted their target price on shares of CarMax from $47.00 to $50.00 and gave the stock a "hold" rating in a report on Thursday, June 18th. Finally, Weiss Ratings upgraded CarMax from a "sell (d)" rating to a "sell (d+)" rating in a research report on Monday, July 20th. Two analysts have rated the stock with a Buy rating, thirteen have issued a Hold rating and three have given a Sell rating to the company. According to data from MarketBeat.com, CarMax currently has an average rating of "Reduce" and a consensus price target of $53.15.

CarMax News Roundup

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: Fiscal second-quarter revenue increased 19.5% to approximately $7.9 billion, while combined retail and wholesale unit sales rose 14.7% to 387,735. Comparable-store used-vehicle sales increased 13.0%, indicating broad-based volume growth. CarMax Reports Second Quarter Fiscal 2027 Results
• Positive Sentiment: CarMax reported adjusted or GAAP EPS of $1.16, well above the $0.73 analyst consensus, and revenue of $7.88 billion versus expectations of $7.09 billion. The earnings beat is the primary catalyst behind the stock’s advance. CarMax Earnings Results
• Positive Sentiment: Management announced leadership appointments supporting its “Shift into GEAR” strategy, including a new chief digital and customer officer role intended to unify the customer experience and support future growth. CarMax Leadership Appointments
• Neutral Sentiment: Options markets were pricing a potentially sizable move around the earnings release, highlighting elevated volatility but not establishing a clear longer-term direction. Options Volatility and Implied Earnings Moves
• Negative Sentiment: Gross profit per retail used vehicle declined $111 to $2,105 as CarMax continued pricing actions. This margin pressure could limit the benefit of higher sales volumes and remains a risk for the stock’s valuation.

CarMax Company Profile

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.

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