Zacks Research Issues Optimistic Outlook for CarMax Earnings

Key Points

• Zacks Research raised CarMax’s Q1 2028 EPS estimate to $1.01 from $0.95 and maintained a “Strong Buy” rating, while also increasing longer-term earnings forecasts.
• CarMax recently exceeded quarterly expectations, reporting $1.31 EPS versus the $0.96 consensus and $8.01 billion in revenue, up 6.2% year over year.
• Despite the bullish Zacks outlook and recent insider purchases, broader analyst sentiment remains cautious: CarMax has a consensus “Hold” rating and an average price target of $51, below its recent $59.93 share price.

CarMax, Inc. (NYSE:KMX - Free Report) - Analysts at Zacks Research increased their Q1 2028 EPS estimates for CarMax in a research report issued to clients and investors on Wednesday, August 12th. Zacks Research analyst Team now forecasts that the company will post earnings per share of $1.01 for the quarter, up from their prior estimate of $0.95. Zacks Research has a "Strong-Buy" rating on the stock. The consensus estimate for CarMax's current full-year earnings is $2.73 per share. Zacks Research also issued estimates for CarMax's Q4 2028 earnings at $0.30 EPS and FY2029 earnings at $3.90 EPS.

A number of other brokerages also recently weighed in on KMX. Weiss Ratings upgraded shares of CarMax from a "sell (d)" rating to a "sell (d+)" rating in a research report on Monday, July 20th. Mizuho upped their target price on shares of CarMax from $38.00 to $43.00 and gave the company a "neutral" rating in a research note on Thursday, June 18th. Bank of America lifted their price target on shares of CarMax from $40.00 to $45.00 and gave the stock an "underperform" rating in a research report on Wednesday, June 17th. Truist Financial upped their price objective on shares of CarMax from $47.00 to $50.00 and gave the company a "hold" rating in a research report on Thursday, June 18th. Finally, Stephens upgraded CarMax from an "equal weight" rating to an "overweight" rating and set a $66.00 target price on the stock in a report on Thursday, June 18th. One investment analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating, fourteen have given a Hold rating and three have issued a Sell rating to the stock. Based on data from MarketBeat, the company has a consensus rating of "Hold" and an average target price of $51.00.

CarMax Trading Up 2.1%

NYSE:KMX opened at $59.93 on Friday. The company has a current ratio of 2.70, a quick ratio of 0.82 and a debt-to-equity ratio of 2.87. CarMax has a 1-year low of $30.26 and a 1-year high of $62.56. The firm has a market capitalization of $8.50 billion, a price-to-earnings ratio of 39.17, a PEG ratio of 2.69 and a beta of 1.15. The business's 50-day moving average price is $54.37 and its two-hundred day moving average price is $46.40.

CarMax (NYSE:KMX - Get Free Report) last posted its quarterly earnings results on Wednesday, June 17th. The company reported $1.31 earnings per share 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 company had revenue of $8.01 billion for the quarter, compared to the consensus estimate of $7.42 billion. During the same quarter in the prior year, the business posted $1.38 EPS. The firm's quarterly revenue was up 6.2% on a year-over-year basis.

Institutional Inflows and Outflows

Hedge funds have recently added to or reduced their stakes in the business. SRS Investment Management LLC boosted its stake in shares of CarMax by 1,717.5% during the 4th quarter. SRS Investment Management LLC now owns 5,637,803 shares of the company's stock worth $217,845,000 after buying an additional 5,327,603 shares during the last quarter. AQR Capital Management LLC raised its holdings in CarMax by 151.8% during the fourth quarter. AQR Capital Management LLC now owns 7,930,345 shares of the company's stock worth $306,429,000 after acquiring an additional 4,780,903 shares in the last quarter. Norges Bank acquired a new position in CarMax during the fourth quarter valued at approximately $159,232,000. Arrowstreet Capital Limited Partnership boosted its position in CarMax by 73.7% during the third quarter. Arrowstreet Capital Limited Partnership now owns 3,522,923 shares of the company's stock valued at $158,074,000 after purchasing an additional 1,494,205 shares during the last quarter. Finally, Pacer Advisors Inc. bought a new position in CarMax in the first quarter valued at approximately $48,634,000.

Insiders Place Their Bets

In other news, Director Peter J. Bensen acquired 2,500 shares of the firm's stock in a transaction that occurred on Monday, June 22nd. The stock was acquired at an average cost 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 in the company, valued at $1,294,351.20. This represents a 11.21% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, Director Sona Chawla bought 2,000 shares of the business's stock in a transaction on Thursday, June 25th. The stock was purchased at an average price of $53.39 per share, for a total transaction of $106,780.00. Following the purchase, the director directly owned 21,702 shares in the company, valued at approximately $1,158,669.78. This represents a 10.15% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. In the last 90 days, insiders bought 13,900 shares of company stock worth $735,574. Corporate insiders own 1.01% of the company's stock.

CarMax News Summary

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: Zacks upgraded CarMax from “Hold” to “Strong Buy,” providing a notable bullish signal. The firm also raised its earnings forecasts across several future periods, including FY2028 EPS to $3.11 from $2.96, FY2029 EPS to $3.90 from $3.21, Q1 2028 EPS to $1.01 from $0.95, and Q4 2028 EPS to $0.30 from $0.25. These revisions suggest improving expectations for CarMax’s longer-term profitability. Zacks rating and estimates
• Positive Sentiment: A leadership change could create additional value, with an analysis suggesting CarMax may be approximately 7% above fair value based on the company’s management transition. The potential for improved execution or strategic direction may be supporting investor interest. CarMax could be 7% above fair value on leadership change
• Positive Sentiment: Recent insider activity is supportive: CEO Keith Barr purchased 9,400 shares and another executive purchased 2,500 shares during the past six months. These open-market purchases can signal management confidence in the company’s prospects.
• Neutral Sentiment: CarMax was named to PEOPLE’s 2026 Companies That Care list for the seventh time, ranking No. 70. The recognition reinforces its employee and community-focused culture but has limited direct impact on earnings or valuation. CarMax named one of the 2026 PEOPLE Companies That Care
• Negative Sentiment: A shareholder-rights law firm is investigating whether CarMax directors and officers breached their fiduciary duties. Although no wrongdoing has been established, the investigation introduces legal and governance uncertainty. CarMax shareholder investigation alert
• Negative Sentiment: Despite Zacks’ bullish stance, the broader analyst data cited includes an “Underperform” rating and a median price target of $45, below the current market level. This suggests some analysts view KMX as fully valued or vulnerable to a pullback.

About CarMax

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.

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 contact@marketbeat.com.

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