Key Stats for CarMax Stock
- Price change for CarMax stock: -15%
- $KMX Share Price as of Apr. 14: $42
- 52-Week High: $72
- $KMX Stock Price Target: $41
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What Happened?
CarMax (KMX) stock dropped sharply on Tuesday despite the company technically beating earnings estimates. The headline number looked fine — $0.34 per share versus $0.21 expected.
But investors focused on what was underneath.
- Year over year, earnings fell 41% for the quarter and 9% for the full year. Revenue slipped 1% for Q4 and 2% for the full year.
- That’s three straight quarters of declining earnings and sales, and the trend isn’t turning around fast enough to reassure the market.
- Gross profit per retail used unit — a closely watched metric — fell by $207 to $2,115.
- That drop reflects deliberate price cuts CarMax made to win back customers.
- The company had lost ground to rivals like Carvana after shoppers viewed CarMax prices as too high.
- Cutting prices helped stabilize unit volumes, but it squeezed margins.
On top of that, CarMax recorded a $141 million non-cash goodwill impairment charge and paused its share buyback program.
Management cited slightly elevated leverage as the reason for the buyback pause, though the $1.1 billion authorization remains in place.
The company also brought in a new CEO. Keith Barr, former head of IHG Hotels & Resorts, joined just weeks before this earnings call.
He was candid about the work ahead, saying the company will prioritize competitive pricing, better digital tools, and faster execution. A fuller strategic update is expected in June.
CarMax Auto Finance showed some resilience, with penetration rising to 42.8% as the company expands into Tier 2 borrowers.
But credit stress is real — delinquencies and roll rates are elevated across mid-tier borrowers, reflecting broader affordability pressure on consumers.
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What the Market Is Telling Us About CarMax Stock
CarMax stock was already under pressure heading into earnings, down more than 40% from its 52-week high. Tuesday’s results confirmed that the recovery is taking longer than investors hoped.
The price cuts are working in terms of traffic and unit trends, but they’re coming at a clear cost to profitability.
With a new CEO just weeks into the role and no detailed strategic plan yet, there’s still meaningful uncertainty about the path forward.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
