Bank of America Initiates Coverage on CarMax (NYSE:KMX)

Research analysts at Bank of America began coverage on shares of CarMax (NYSE:KMX) in a research report issued on Wednesday. The firm set an “underperform” rating and a $40.00 price target on the stock. Bank of America‘s target price suggests a potential downside of 1.28% from the company’s previous close.

Other analysts have also issued research reports about the company. Benchmark reaffirmed a “hold” rating on shares of CarMax in a research report on Tuesday, December 16th. Robert W. Baird upped their price objective on CarMax from $44.00 to $48.00 and gave the stock an “outperform” rating in a research report on Wednesday, February 18th. Wall Street Zen raised CarMax from a “sell” rating to a “hold” rating in a research report on Saturday, April 4th. JPMorgan Chase & Co. cut their price objective on CarMax from $30.00 to $28.00 and set an “underweight” rating on the stock in a research report on Friday, December 19th. Finally, Royal Bank Of Canada reaffirmed a “sector perform” rating and set a $41.00 price objective on shares of CarMax in a research report on Wednesday. One investment analyst has rated the stock with a Buy rating, twelve have issued a Hold rating and five have assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock presently has an average rating of “Reduce” and a consensus price target of $41.21.

CarMax Stock Up 0.0%

CarMax stock opened at $40.52 on Wednesday. CarMax has a twelve month low of $30.26 and a twelve month high of $71.99. The stock’s fifty day simple moving average is $42.77 and its 200-day simple moving average is $41.96. The company has a current ratio of 2.20, a quick ratio of 0.51 and a debt-to-equity ratio of 2.93. The firm has a market capitalization of $5.75 billion, a P/E ratio of 25.32, a P/E/G ratio of 1.07 and a beta of 1.30.

CarMax (NYSE:KMX) last posted its quarterly earnings data on Tuesday, April 14th. The company reported $0.34 earnings per share for the quarter, topping analysts’ consensus estimates of $0.22 by $0.12. CarMax had a return on equity of 7.00% and a net margin of 0.96%.The business had revenue of $5.95 billion for the quarter, compared to analyst estimates of $5.65 billion. During the same quarter in the prior year, the company earned $0.58 earnings per share. The company’s revenue was down 1.0% on a year-over-year basis. As a group, equities analysts expect that CarMax will post 3.23 earnings per share for the current fiscal year.

Hedge Funds Weigh In On CarMax

A number of institutional investors and hedge funds have recently modified their holdings of the company. AQR Capital Management LLC grew its stake in shares of CarMax by 151.8% during the fourth quarter. AQR Capital Management LLC now owns 7,930,345 shares of the company’s stock worth $306,429,000 after purchasing an additional 4,780,903 shares in the last quarter. SRS Investment Management LLC grew its stake in shares of CarMax by 1,717.5% during the fourth quarter. SRS Investment Management LLC now owns 5,637,803 shares of the company’s stock worth $217,845,000 after purchasing an additional 5,327,603 shares in the last quarter. Norges Bank acquired a new position in shares of CarMax during the fourth quarter worth $159,232,000. Dimensional Fund Advisors LP grew its stake in shares of CarMax by 8.2% during the fourth quarter. Dimensional Fund Advisors LP now owns 3,985,895 shares of the company’s stock worth $154,023,000 after purchasing an additional 300,694 shares in the last quarter. Finally, Arrowstreet Capital Limited Partnership grew its stake in shares of CarMax by 73.7% during the third quarter. Arrowstreet Capital Limited Partnership now owns 3,522,923 shares of the company’s stock worth $158,074,000 after purchasing an additional 1,494,205 shares in the last quarter.

CarMax News Summary

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: Q4 results beat expectations — CarMax reported $0.34 EPS vs. $0.22 expected and revenue topped estimates, evidence of underlying sales strength. CarMax Q4 Earnings Beat Estimates
• Neutral Sentiment: Management outlined strategic moves (price cuts to reaccelerate retail sales and cost controls) that are intended to restore demand but will pressure margins in the near term. CarMax Q4 2026 Earnings Call Highlights
• Negative Sentiment: Guidance and margin outlook disappointed — commentary pointed to contracting retail margins, impaired cash flow and a suspension of buybacks, which led markets to focus on near-term profitability risk. Carmax at 5-Year Lows
• Negative Sentiment: Analysts moved to more negative stances — Bank of America initiated coverage with an “underperform”/sell view (PT $40) and other firms highlighted margin/demand headwinds; JPMorgan raised its price target but kept an underweight rating, indicating continued bearish positioning. Margin Compression and Sell Rating JPMorgan Price Target Change
• Negative Sentiment: Market reaction: coverage and media noted share weakness after the release — headlines emphasize the stock pullback despite the beat, centered on price cuts and near-term margin damage. CarMax Exceeds Q1 Expectations But Stock Drops

About CarMax

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.