CarMax, Inc. (KMX)

Over the past six months, CarMax's stock has trended down. Key events impacting the stock price include dismal Q2 FY2026 financial results, concerns regarding the quality of the CAF loan portfolio, the CEO's termination, weak sales and margins reported in Q3 FY2025, strong earnings growth and positive trends reported in Q1 FY2026, positive market reception to Q2 CY2025 results, and robust performance demonstrated in Q4 FY2025.

Demand for CarMax's products and services exhibits seasonality. Credit trends for CarMax Auto Finance typically worsen in the fourth fiscal quarter and then rebound in the first fiscal quarter, often aided by tax refunds. These tax refunds can also contribute to a temporary increase in demand for used cars and other discretionary items. Strong Q1 service margins may not be sustainable throughout the year due to seasonal factors. Seasonal factors, such as higher sales and lower credit quality in Q1, have impacted CAF income.

CarMax, Inc. is the largest retailer of used vehicles in the United States, headquartered in Richmond, Virginia. The company operates within the Consumer Discretionary sector and the Automotive Retail industry, emphasizing transparency and a no-haggle pricing model, alongside comprehensive vehicle inspections. CarMax offers used vehicle retail sales through physical and online channels. They provide vehicle appraisal and purchasing services, wholesale auctions to licensed dealers, and financing options through CarMax Auto Finance (CAF). Additionally, they offer extended protection plans (MaxCare) and reconditioning and vehicle repair services.

CarMax operates over 240 retail locations across 41 states in the United States. The company's headquarters are in Richmond, Virginia, while CarMax Auto Finance operates from Kennesaw, Georgia. As of January 2025, CarMax operates 253 locations.

CarMax has maintained a strong brand reputation as an employer, being named one of Fortune magazine's 100 Best Companies to Work For for the 21st consecutive year in 2025, ranking #69. This recognition is based on anonymous employee surveys and highlights the company's commitment to associate development and customer satisfaction.

CarMax, Inc. is primarily owned by institutional investors, holding approximately 84.10% of the company's stock. Major institutional owners include Vanguard Group Inc, BlackRock, Inc., State Street Corp, Janus Henderson Group Plc, Diamond Hill Capital Management Inc, Primecap Management Co/ca/, and Dimensional Fund Advisors Lp. Individual and retail investors hold approximately 15.40% of the company's stock.