KMX Stock Analysis — CarMax
Sector: Retail
AI Verdict
CarMax trades at 22.2x next year's earnings with 31% growth expected, so you're paying a slight premium that only makes sense if its national platform can actually deliver the rebound analysts are counting on.
Competitive Moat
CarMax operates the largest used car dealership network in the U.S., leveraging national scale and a proprietary appraisal system to offer consistent pricing and inventory selection. Its omnichannel platform and brand recognition create switching costs for consumers wary of private sales or less transparent competitors.
Summary
CarMax is notable for its national used car platform and the expectation of a sharp 31% rebound in earnings over the next year.
Where It Stands
Shares are down -24.41% over the past year, with an RSI of 67.2 signaling elevated pullback risk, and trade at 22.2x next year's earnings versus the retail sector's typical 20x.
Key Metrics
- RSI: 67.2 — Near Overbought
- Trailing P/E: 29.1x
- Forward P/E: 22.2x
- PEG Ratio: 0.76
- Earnings Growth: +0.3%
- Revenue Growth: -0.0%
- Market Cap: $6.9B
- 1-Year Return: -24.41%
- 52-Week High: $71.99
- 52-Week Low: $30.26
Analyst Consensus
2 Buy · 18 Hold · 8 Sell (28 analysts)
Bull Case
Analysts expect 31.0% forward EPS growth, so the 22.2x forward P/E is cheap for the rebound if CarMax's scale advantage helps it regain volume.
Bear Case
With an RSI of 67.2 and a trailing P/E of 29.1x, a pullback to the sector median 20x would mean another 31% downside if growth stalls.
Catalyst to Watch
Watch for quarterly earnings updates—if forward EPS guidance slips below 30%, the premium multiple could evaporate quickly.