CarMax (NYSE:KMX) Announces Earnings Results, Beats Estimates By $0.12 EPS

CarMax (NYSE:KMX) released its quarterly earnings results on Tuesday. The company reported $0.34 EPS for the quarter, topping analysts’ consensus estimates of $0.22 by $0.12, Briefing.com reports. CarMax had a net margin of 0.96% and a return on equity of 7.00%. The business had revenue of $5.95 billion for the quarter, compared to analyst estimates of $5.65 billion. During the same period last year, the firm earned $0.58 earnings per share. CarMax’s revenue for the quarter was down 1.0% compared to the same quarter last year.

Here are the key takeaways from CarMax’s conference call:

• Keith Barr was named CEO, bringing hospitality-led digital and customer-first experience priorities (omnichannel, AI/tech, urgency) that management says will drive a turnaround and long-term growth.
• Q4 results showed weakening profitability — adjusted EPS $0.34 (vs. $0.64 prior year) and a GAAP loss driven by a $0.99 non?cash goodwill impairment and restructuring charges that together reduced EPS by ~$1.19; total gross profit fell 9% year?over?year.
• Management cut prices, increased acquisition marketing and digital enhancements, which improved sales trends versus prior quarters, but expects FY?2027 used margins to decline roughly in line with Q4 (with Q1 down as much as ~$300/unit) while rolling out an EPP redesign expected to add ?$35/unit.
• Company reiterated cost focus with an increased target of $200 million FY?2027 exit?rate SG&A reductions (full annualization expected in FY?2028), reduced FY?2027 CapEx to about $400 million, and has paused share repurchases to manage leverage despite keeping the buyback authorization in place.
• CarMax Auto Finance originated ~$1.9 billion in Q4 (penetration 42.8%) and is expanding into the top half of Tier?2 to retain more finance income; CAF income was down 10% to $144M and reserves ended at $453M (2.78%), with a $100M non?prime pool designated held?for?sale.

CarMax Price Performance

KMX stock opened at $40.43 on Thursday. The company has a quick ratio of 0.51, a current ratio of 2.20 and a debt-to-equity ratio of 2.93. CarMax has a 12 month low of $30.26 and a 12 month high of $71.99. The firm has a market cap of $5.73 billion, a P/E ratio of 25.27, a P/E/G ratio of 1.10 and a beta of 1.30. The company’s 50-day moving average price is $42.87 and its two-hundred day moving average price is $41.97.

Institutional Investors Weigh In On CarMax

Several hedge funds and other institutional investors have recently made changes to their positions in KMX. CYBER HORNET ETFs LLC bought a new stake in shares of CarMax during the 2nd quarter valued at approximately $28,000. MUFG Securities EMEA plc bought a new stake in shares of CarMax during the 2nd quarter valued at approximately $30,000. Advisory Services Network LLC bought a new stake in shares of CarMax during the 3rd quarter valued at approximately $32,000. UMB Bank n.a. grew its holdings in shares of CarMax by 336.6% during the 4th quarter. UMB Bank n.a. now owns 2,074 shares of the company’s stock valued at $80,000 after purchasing an additional 1,599 shares during the last quarter. Finally, Parallel Advisors LLC grew its holdings in shares of CarMax by 390.9% during the 4th quarter. Parallel Advisors LLC now owns 2,165 shares of the company’s stock valued at $84,000 after purchasing an additional 1,724 shares during the last quarter.

Trending Headlines about CarMax

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: Adjusted Q4 results topped expectations — adjusted EPS of $0.34 beat consensus (~$0.22) and revenue of about $5.95B also exceeded forecasts, showing resiliency in top-line sales. Management highlighted areas where adjusted performance held up despite headwinds. CarMax Q4 Earnings Beat Estimates Despite Pricing-Driven Margin Hit
• Positive Sentiment: Management is accelerating a tech and efficiency push under new CEO Keith Barr and plans SG&A reductions and tech investments to streamline the buying/selling experience — actions that could help restore margins over time. CarMax Bets on Tech to Streamline Used Car Buying Journey
• Neutral Sentiment: Management described a transitional period: price cuts to drive traffic have improved competitiveness but compress margins; the company signaled cautious 2027 guidance and emphasized a multi-quarter recovery path rather than an immediate rebound. CarMax Inc (KMX) Q4 2026 Earnings Call Highlights
• Negative Sentiment: GAAP results showed a quarterly loss driven by a significant goodwill impairment and weaker vehicle gross profit; quarter included elevated credit?loss provisioning that further weighed on net income. Those items were the main near-term drivers of the share weakness. CarMax posts quarterly loss on goodwill charge, weak used-car demand
• Negative Sentiment: Analyst reaction leans negative: multiple firms initiated or reiterated sell/underperform/underweight stances (including a new sell from a Bank of America analyst and an underweight from JPMorgan, which raised its target but kept a negative rating). These notes increase downside pressure on sentiment and price targets. CarMax: Margin Compression and Demand Headwinds Undermine Earnings
• Negative Sentiment: Investor reaction was sharp: the stock sold off after the release as markets focused on the GAAP loss, margin erosion from price cuts and higher reserves despite the adjusted beat — short-term outlook and margin visibility remain the principal risks. CarMax slides in early investor reaction to FQ4 earnings

Wall Street Analyst Weigh In

KMX has been the topic of a number of recent research reports. Robert W. Baird raised their price target on shares of CarMax from $44.00 to $48.00 and gave the stock an “outperform” rating in a research report on Wednesday, February 18th. Wedbush decreased their target price on shares of CarMax from $40.00 to $36.00 and set a “neutral” rating on the stock in a report on Friday, December 19th. Barclays raised their target price on shares of CarMax from $24.00 to $28.00 and gave the company an “underweight” rating in a report on Wednesday, January 21st. JPMorgan Chase & Co. raised their target price on shares of CarMax from $28.00 to $35.00 and gave the company an “underweight” rating in a report on Wednesday. Finally, Zacks Research raised shares of CarMax from a “strong sell” rating to a “hold” rating in a report on Monday, January 5th. One equities research analyst has rated the stock with a Buy rating, twelve have assigned a Hold rating and five have issued a Sell rating to the company’s stock. According to data from MarketBeat, CarMax has an average rating of “Reduce” and a consensus target price of $41.36.

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.