CarMax, Inc. research snapshot
KMX AI stock analysis sees CarMax as a scaled used-vehicle retailer with a second earnings engine in CarMax Auto Finance. Fiscal 2026 revenue was $25.88 billion, but net earnings fell 50.6% to $247.3 million after a goodwill impairment charge and a difficult operating year. In the first quarter of fiscal 2027, revenue rose 6.2%, while comparable-store used unit sales declined 0.8% and retail gross profit per unit fell to $2,177. CEO Keith Barr's four-pillar strategy and a targeted $200 million SG&A exit-rate reduction could improve earnings, but CAF credit losses, funding costs, inventory values, competition, and execution remain material risks. The latest available NYSE close was $53.49 on July 10, 2026, with a market capitalization of about $7.59 billion. The KMX AI stock forecast below uses scenarios rather than a precise prediction. This page is informational research, not investment advice.
Current price
$53.49 USD (NYSE close, July 10, 2026)
Market cap
$7.59 billion USD
AI score
56 / 100
Rating
Turnaround execution with used-auto and credit-cycle risk
Trend status
Short-term momentum is positive, but the move is near overbought levels
Data cutoff (updated weekly)
July 12, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | CarMax combines a large used-vehicle retail and wholesale network with CAF financing, extended protection products, service, and digital transactions. The model has scale, but margins are thin and sensitive to vehicle prices and consumer credit. | High |
| Moat | Brand trust, no-haggle pricing, nationwide sourcing, inventory scale, reconditioning, omni-channel tools, and CAF data create switching friction and operating advantages. The moat is real but not immune to online competitors or dealer price competition. | Medium |
| Management | New CEO Keith Barr has defined four operating pillars and is targeting $200 million of SG&A exit-rate savings by the end of fiscal 2027. The plan is testable, but the evidence is limited to early execution. | Medium |
| Financial trend | FY2024 to FY2026 revenue was $26.54 billion, $26.35 billion, and $25.88 billion. Net earnings were $479.2 million, $500.6 million, and $247.3 million, with FY2026 also including a $141.3 million goodwill impairment charge. | High |
| Valuation | At $53.49, the financial_rigor.py check produced 34.73x TTM EPS, 1.27x book value, and 7.63x TTM free cash flow. The base three-year scenario of $34.90 is below the latest close, so the margin of safety is limited unless earnings recover faster than the base case. | Medium-high |
| Technical trend | The July 10 snapshot showed price above the 50-day SMA of $51.43 and 200-day SMA of $50.17, with RSI 64.15 and a strong daily signal. Stochastic 84.68 also warns that short-term momentum is becoming stretched. | Medium-high |
| Risk level | Risk is elevated because vehicle inventory can reprice quickly, CAF depends on borrower performance and securitization funding, total debt is large, and retail demand is tied to affordability, rates, employment, and competition. | High |
| AI confidence | Confidence is strongest for historical financials, Q1 operating metrics, share count, price, valuation inputs, and disclosed strategy. Confidence is lower for the timing of margin recovery, used-car prices, and future credit losses. | Medium-high |
| Investment certainty | Medium-low certainty. CarMax may benefit from operating leverage and a better customer proposition, but the current price requires a credible recovery in earnings and cash generation. | Medium-low |
KMX AI stock forecast
The KMX AI stock forecast is a three-year sensitivity model, not a price promise. Using $1.54 of TTM EPS, 20% / 8% / negative 10% annual EPS growth, and 22x / 18x / 12x terminal multiples, financial_rigor.py produced mechanical outcomes of $58.50, $34.90, and $13.50. The model excludes dividends, dilution, changes in used-car prices, credit losses, and the timing of buybacks.
$50 to $65 over three years
Comparable retail sales turn positive, pricing actions restore unit volume without a major margin sacrifice, the $200 million SG&A savings target is delivered, CAF losses remain controlled, and buybacks support per-share earnings. The model output is $58.50 at 20% EPS growth and 22x PE.
$30 to $40 over three years
Unit growth improves gradually, retail margins stay below peak levels, CAF income is stable to modestly higher, and cost savings arrive over time. The model output is $34.90 at 8% EPS growth and 18x PE.
$10 to $18 over three years
Affordability pressure reduces demand, used-car depreciation or wholesale prices hurt gross profit, CAF credit losses rise, funding costs stay high, and the new operating plan misses milestones. The model output is $13.50 at negative 10% EPS growth and 12x PE.
KMX AI technical analysis
This KMX AI technical analysis at the July 12, 2026 data cutoff uses the latest detailed Investing.com snapshot dated July 10, 2026 and the July 10 close from StockAnalysis. Price was above the 50-day and 200-day averages, while RSI was 64.15 and Stochastic was 84.68. That is constructive momentum with a warning that the short-term tape may be extended. These levels are reference points, not trading instructions.
| Level | Value | Why it matters |
|---|---|---|
| Primary support | $50.17 200-day SMA | The longer-term moving-average reference. A sustained close below it would weaken the current bullish trend structure. |
| Secondary support | $51.43 50-day SMA | The intermediate trend reference. Holding above it keeps the recent momentum structure intact. |
| Pivot resistance | $53.63 classic pivot | The July 10 classic pivot was just above the close. Acceptance above it would keep buyers in control, while rejection would increase range risk. |
| Near-term resistance | $54.01 classic R3 | A nearby resistance reference from the same daily technical snapshot. A breakout needs volume and follow-through to reduce false-breakout risk. |
| Momentum | RSI 64.15; Stochastic 84.68 | RSI was constructive, while the Stochastic reading was in an overbought zone. Momentum can remain strong while still carrying pullback risk. |
| Volume and volatility | 1.96 million shares; ATR(14) 0.6844; beta 1.16 | The July 10 volume and beta came from StockAnalysis, while ATR came from Investing.com. The price can move sharply around earnings and used-car data. |
| Invalidation level | Daily close below $50.17 | This is a technical invalidation reference only. Fundamental invalidation would include falling comparable sales, rising CAF allowance rates, or missed savings milestones. |
KMX AI trading strategy
This KMX AI trading strategy is a rules-based research framework, not personalized advice. It combines trend confirmation with operating and credit checks because the stock can respond to both chart momentum and used-auto fundamentals.
Study a sustained move above the $54.01 resistance reference only if volume expands and the next earnings update confirms better retail unit trends, stable CAF losses, and progress toward the $200 million savings target.
Define risk before entry. A close below the $51.43 50-day average is an early warning, while $50.17 is the stated technical invalidation reference. Do not treat a strong daily signal as a guarantee.
A pullback toward the $50.17 to $51.43 area could be studied only if used-vehicle pricing, comparable sales, CAF allowance rates, and funding access remain stable. This setup depends on support holding, not on a promised rebound.
Do not average down automatically. Exit or reassess if support fails, inventory losses increase, credit performance weakens, or management reduces its savings and growth objectives.
Track comparable retail units, gross profit per retail unit, wholesale volume and pricing, CAF penetration, allowance for loan losses, used-car indexes, inventory turns, operating cash flow, debt funding, and buyback pace.
Use position sizing, a predefined loss limit, and an earnings-date review. A scenario range is not a promise and does not protect against overnight gaps or changes in credit conditions.
Investment research summary
CarMax helps consumers buy and sell used vehicles through a large retail and wholesale network. Customers pay for selection, transparent pricing, reconditioning, convenience, and financing access. The business also earns from CAF, protection products, service, and data-enabled operations.
The moat comes from brand trust, no-haggle processes, nationwide vehicle sourcing, inventory breadth, reconditioning scale, store density, digital tools, and CAF underwriting data. It is strongest when customers value transparency and convenience, and weaker when price is the only decision factor.
The thesis can fail if high rates and vehicle prices keep customers out of the market, inventory depreciates faster than it turns, wholesale demand weakens, CAF defaults exceed reserves, securitization funding becomes costly, or digital competitors take share. The FY2026 goodwill impairment is a reminder that scale does not eliminate execution risk.
CEO Keith Barr began leading CarMax in early 2026 and introduced the Great Offering, Easy Experience, Add Value on Each Transaction, and Run Lean pillars. The $200 million SG&A exit-rate target is measurable. Capital allocation also includes FY2026 share repurchases of $642.8 million, which deserve scrutiny while earnings remain depressed.
Used vehicles address transportation needs at a lower entry price than new vehicles, and digital retail, data, and embedded finance can improve the buying process. The industry is still cyclical: affordability, employment, interest rates, vehicle supply, EV residual values, regulation, and lender risk appetite shape demand.
The latest price is about 34.7x TTM EPS, although cash flow makes the multiple look lower at 7.6x TTM FCF. The base model output of $34.90 is below the $53.49 close. A margin of safety therefore requires stronger earnings recovery evidence, a lower price, or both.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| NYSE share price | $53.49 USD at July 10, 2026 close | StockAnalysis | July 12, 2026 |
| Market cap and shares | $7.59B USD; 141.91M shares | StockAnalysis; market-cap check variance 0.00% | July 12, 2026 |
| FY2026 revenue and net earnings | $25.881B revenue; $247.3M net earnings | CarMax FY2026 10-K and StockAnalysis | July 12, 2026 |
| FY2026 cash flow | $1.784B operating cash flow; $1.243B free cash flow | CarMax FY2026 10-K and StockAnalysis | July 12, 2026 |
| Cash, debt, and equity | $122.83M cash; $18.05B total debt in the 10-K; $5.89B equity at FY2026 end | CarMax FY2026 10-K; StockAnalysis cross-check | July 12, 2026 |
| Q1 FY2027 operating update | $8.014B revenue; 392,357 combined units; $1.31 diluted EPS | CarMax Q1 FY2027 results, June 17, 2026 | July 12, 2026 |
| CAF credit and strategy metrics | 43.3% CAF penetration; 2.95% loan-loss allowance rate; $200M targeted SG&A exit-rate savings | CarMax Q1 FY2027 results | July 12, 2026 |
| Valuation inputs | TTM EPS $1.54; BVPS $42.23; TTM FCF/share $7.01; no dividend | StockAnalysis; checked with financial_rigor.py | July 12, 2026 |
| Technical levels | 50-day SMA $51.43; 200-day SMA $50.17; RSI 64.15; ATR(14) 0.6844 | Investing.com technical snapshot, July 10, 2026 | July 12, 2026 |
This KMX AI stock analysis is an informational tool, not investment advice, a recommendation, or a promise of returns. Forecasts are scenario ranges based on available data and assumptions that may be wrong. Verify company filings, market data, tax effects, credit conditions, and your own risk tolerance before making financial decisions.
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