CarMax, Inc. research snapshot
KMX AI stock analysis sees CarMax as the largest US used-vehicle retailer with a second earnings engine in CarMax Auto Finance. Fiscal 2026 net sales and operating revenues were $25.88 billion, but net earnings fell 50.6% to $247.3 million after a goodwill impairment charge and a difficult operating year. The first quarter of fiscal 2027 showed early progress: total net revenues rose 6.2% to $8.0 billion, total unit sales rose 3.3%, and SG&A per unit improved, while comparable-store used unit sales still 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 are on track, and CEO and director share purchases plus upgrades from JPMorgan and Barclays supported the stock, which rose from $47.43 on June 17 to $57.26 on July 31, 2026. The latest close gives a market capitalization of about $8.13 billion and sits above the $54.85 average analyst price target. The KMX AI stock forecast below uses scenarios rather than a precise prediction. This page is informational research, not investment advice.
Current price
$57.26 USD (NYSE close, July 31, 2026)
Market cap
$8.13 billion USD
AI score
58 / 100
Rating
Early turnaround progress with valuation ahead of confirmed results
Trend status
Price is above its 50-day and 200-day averages; momentum is positive but the stock has risen about 21% since the June report and sits near the top of its 52-week range
Data cutoff (updated monthly)
August 4, 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 on track toward $200 million of SG&A exit-rate savings by the end of fiscal 2027. Insider purchases add confidence, but execution evidence still covers only one quarter. | Medium |
| Financial trend | FY2024 to FY2026 net sales and operating revenues were $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. Q1 FY2027 net earnings were still down 11.8% year over year. | High |
| Valuation | At $57.26, the financial_rigor.py check produced 37.18x TTM EPS, 1.33x book value, and 8.17x TTM free cash flow. The base three-year scenario of $34.90 is well 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 31 snapshot showed price above the 50-day SMA of $51.21 and 200-day SMA of $43.73, with RSI 58.32. The stock is in an uptrend but has already risen about 21% since the June earnings report and trades near the upper end of its 52-week range. | 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, short interest remains meaningful, 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 already reflects a fairly quick recovery, so results must confirm the improvement. | 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. Because the stock already trades near the bullish model output and above the $54.85 average analyst target, the reward for a confirmed recovery is narrower than it was in mid-June.
$55 to $70 over three years
Comparable sales turn positive, retail gross profit per unit stabilizes or recovers, the $200 million SG&A savings target is delivered, CAF losses remain controlled, and the credit cycle holds. The model output is $58.50 at 20% EPS growth and 22x PE, and bullish targets such as Stephens at $66 sit near the top of this range.
$35 to $50 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, which lines up with the 8.9% EPS growth the sell-side consensus expects over three years.
$10 to $20 over three years
Affordability pressure reduces demand, used-car depreciation or wholesale prices hurt gross profit, CAF credit losses rise, securitization funding becomes costly, or the 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 August 2026 data cutoff uses the latest detailed market snapshot dated July 31, 2026. Price closed at $57.26, above the 50-day average of $51.21 and the 200-day average of $43.73, with RSI at 58.32. The trend is constructive after a sharp recovery from the June low, but the stock trades near the upper part of its 52-week range, so momentum must be confirmed with follow-through. These levels are reference points, not trading instructions.
| Level | Value | Why it matters |
|---|---|---|
| Primary support | $56.61 classic pivot S1 | The July 31 classic pivot support just under the close. Holding above it keeps the near-term range intact. |
| Secondary support | $51.21 50-day SMA | The intermediate trend reference. A sustained close below it would weaken the current bullish structure. |
| Deeper support | $43.73 200-day SMA | The longer-term trend reference. A move back toward this level would imply a broken rally. |
| Pivot resistance | $57.56 classic pivot | The July 31 classic pivot sits near the close. Acceptance above it keeps buyers in control. |
| Near-term resistance | $58.21 classic R1 | A nearby resistance reference from the same daily snapshot. Follow-through with volume reduces false-breakout risk. |
| Major resistance | $61 to $62.56 | The July 29 intraday high of $61.15 and the 52-week high of $62.56. A breakout above this zone would be the strongest confirmation. |
| Momentum | RSI 58.32 | RSI is in a constructive, not overbought, zone after the July run, leaving room for further gains but also for consolidation. |
| Volume and volatility | 20-day average volume about 2.82 million; beta 1.16 | Volume has settled below the surge seen around the June earnings report. The stock can still move sharply around earnings and credit data. |
| Invalidation level | Daily close below $51.21 | 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 $58.21 and then the $61 to $62.56 resistance zone only if volume expands and the September 29 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 $51.21 50-day average is an early warning and the stated technical invalidation reference. Do not treat a strong daily signal as a guarantee.
A pullback toward the $51.21 to $54 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 price indexes, inventory turns, operating cash flow, securitization funding, and the pace of any resumed buybacks.
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 and finances many of those sales through CarMax Auto Finance. Customers pay for selection, transparent pricing, reconditioning, convenience, and financing access. The business also earns from 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 and the Q1 FY2027 pause in buybacks are reminders 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 on track after one quarter. CEO and director share purchases after the Q1 report align incentives, while the buyback pause protects the balance sheet but removes a shareholder-return tool for now.
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 remains cyclical: affordability, employment, interest rates, vehicle supply, EV residual values, tariffs, regulation, and lender risk appetite shape demand.
The latest price is about 37.2x TTM EPS and 1.33x book value, although the cash flow multiple is much lower at 8.2x TTM free cash flow. The base model output of $34.90 is below the $57.26 close, and the average analyst target of $54.85 is also below the market. A margin of safety therefore requires either a price pullback or stronger earnings recovery evidence.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| NYSE share price | $57.26 USD at July 31, 2026 close | StockAnalysis | August 3, 2026 |
| Market cap and shares | $8.13B USD; 141.91M shares | StockAnalysis; market-cap check variance 0.05% | August 3, 2026 |
| FY2026 revenue and net earnings | $25.881B net sales and operating revenues; $247.3M net earnings; $1.879B CAF income | StockAnalysis financials and CarMax FY2026 10-K | August 3, 2026 |
| FY2026 cash flow | $1.784B operating cash flow; $1.243B free cash flow | StockAnalysis financials | August 3, 2026 |
| Cash, debt, and equity | $132.2M cash; $18.6B total debt; $6.12B equity at May 31, 2026 | CarMax Q1 FY2027 report and StockAnalysis | August 3, 2026 |
| Q1 FY2027 operating update | $8.0B net revenues; 392,357 combined units; $1.31 diluted EPS; comps -0.8% | CarMax Q1 FY2027 results, June 17, 2026 | August 3, 2026 |
| CAF credit and strategy metrics | 43.3% CAF penetration; 2.95% loan-loss allowance rate; 11.3% contract rate; $200M targeted SG&A exit-rate savings | CarMax Q1 FY2027 results | August 3, 2026 |
| Analyst consensus | Hold from 19 analysts; average target $54.85; 3-year EPS growth forecast 8.92% | StockAnalysis forecast | August 3, 2026 |
| Valuation inputs | TTM EPS $1.54; BVPS $43.12; TTM FCF/share $7.01; no dividend | StockAnalysis; checked with financial_rigor.py | August 3, 2026 |
| Technical levels | 50-day SMA $51.21; 200-day SMA $43.73; RSI 58.32; beta 1.16; 52-week range $30.26 to $62.56 | StockAnalysis statistics, July 31, 2026 | August 3, 2026 |
| Recent analyst and insider activity | JPMorgan upgrade to Neutral with $60 target on July 28; Barclays upgrade to Equal Weight with $61 target on July 21; CEO bought 9,400 shares on June 22 | TheFly and TipRanks via StockAnalysis news | August 3, 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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