CarMax (NYSE:KMX) Shares Gap Down – Here’s What Happened

CarMax, Inc. (NYSE:KMX)’s stock price gapped down prior to trading on Wednesday . The stock had previously closed at $52.11, but opened at $49.97. CarMax shares last traded at $48.8740, with a volume of 1,799,592 shares trading hands.

CarMax News Summary

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: CarMax reported fiscal Q1 adjusted EPS of $1.31 and revenue of $8.01 billion, both above analyst estimates, with revenue up 6.2% year over year. CarMax Reports First Quarter Fiscal 2027 Results
• Positive Sentiment: Several analysts turned more constructive after the report, including Stephens upgrading the stock to overweight and raising its price target to $66, while Mizuho and JPMorgan also lifted targets. CarMax Analysts Boost Their Forecasts After Upbeat Q1 Results
• Positive Sentiment: Investors reacted favorably to signs that CarMax is gaining traction on its turnaround plan, with higher wholesale demand and improved sales momentum helping support the rebound in the stock. Reuters article
• Neutral Sentiment: Management emphasized that the recovery will take time, and some analysts said they still want more evidence that profitability can improve consistently before becoming fully bullish. CNBC article
• Negative Sentiment: Profitability remains under pressure, with gross profit per vehicle and net income down year over year as CarMax used pricing actions to drive sales, which keeps margin concerns in focus. Wall Street Journal article
• Negative Sentiment: Despite the upbeat earnings report, some investors remain cautious because CarMax still faces margin compression, credit-risk concerns, and a lengthy turnaround timeline under new CEO Keith Barr. Motley Fool article

Wall Street Analysts Forecast Growth

A number of research firms have recently commented on KMX. Royal Bank Of Canada lifted their target price on CarMax from $41.00 to $45.00 and gave the stock a “sector perform” rating in a research note on Thursday. Argus upgraded shares of CarMax to a “hold” rating in a research report on Thursday, April 16th. Benchmark restated a “hold” rating on shares of CarMax in a report on Thursday. UBS Group began coverage on shares of CarMax in a research report on Wednesday, May 27th. They issued a “neutral” rating and a $42.00 price objective on the stock. Finally, JPMorgan Chase & Co. boosted their target price on shares of CarMax from $37.00 to $38.00 and gave the company an “underweight” rating in a research note on Thursday. Two investment analysts have rated the stock with a Buy rating, thirteen have assigned a Hold rating and five have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock currently has a consensus rating of “Reduce” and a consensus price target of $46.13.

CarMax Stock Performance

The stock has a market capitalization of $7.59 billion, a P/E ratio of 34.99, a price-to-earnings-growth ratio of 1.79 and a beta of 1.21. The company has a 50 day simple moving average of $42.56 and a 200-day simple moving average of $42.56. The company has a debt-to-equity ratio of 2.87, a current ratio of 2.70 and a quick ratio of 0.49.

CarMax (NYSE:KMX) last issued its quarterly earnings results on Wednesday, June 17th. The company reported $1.31 EPS for the quarter, beating analysts’ consensus estimates of $0.96 by $0.35. The firm had revenue of $8.01 billion for the quarter, compared to analysts’ expectations of $7.42 billion. CarMax had a return on equity of 6.64% and a net margin of 0.84%.The business’s revenue for the quarter was up 6.2% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $1.38 EPS. On average, equities analysts forecast that CarMax, Inc. will post 2.31 EPS for the current year.

Institutional Investors Weigh In On CarMax

Institutional investors have recently added to or reduced their stakes in the business. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its position in CarMax by 0.6% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 31,389 shares of the company’s stock worth $2,446,000 after purchasing an additional 173 shares during the period. Jones Financial Companies Lllp increased its stake in shares of CarMax by 3.1% in the first quarter. Jones Financial Companies Lllp now owns 5,372 shares of the company’s stock worth $419,000 after purchasing an additional 161 shares in the last quarter. Empowered Funds LLC raised its position in shares of CarMax by 12.5% in the first 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 raised its position in shares of CarMax by 61.7% in the first 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 purchased a new stake in shares of CarMax during the 1st quarter valued at approximately $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.