Key Stats for CarMax Stock
- Pre-market price change for CarMax stock: 1%
- $KMX Share Price as of Mar. 11: $43
- 52-Week High: $83
- $KMX Stock Price Target: $39
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What Happened?
CarMax stock (KMX) is almost stable today after activist investor Starboard Value revealed a $350 million stake in the used car retailer.
Starboard also nominated its own CEO, Jeff Smith, to the CarMax board, along with Bill Cobb, chairman and CEO of Frontdoor Inc.
The move signals that one of Wall Street’s most respected activists sees significant upside in a company that has struggled badly over the past year.
CarMax stock is down roughly 41% in the past twelve months, badly lagging rivals like Carvana, which is up 80% over the same period.
Starboard’s thesis is straightforward.
CarMax is a market leader with over 250 physical locations, a financing arm, and a recognized brand — but it has become “complacent,” according to Smith.
He believes the company’s assets are so undervalued that investors are essentially getting them for free, with CarMax trading near tangible book value.
Starboard also supports incoming CEO Keith Barr, who starts this month. Barr previously led a successful digital transformation at InterContinental Hotels, and Starboard believes those skills translate directly to what CarMax needs.
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What the Market Is Telling Us About CarMax Stock
CarMax stock has had a brutal run.
- The company has been losing ground to Carvana and other digital-first competitors, and its Q3 earnings showed used unit comps down 9% year-over-year.
- Management has been cutting prices and stepping up marketing to reverse the trend, but results have been slow to materialize.
Starboard’s involvement adds a new layer of urgency.
The firm wants CarMax to cut overheads by more than $300 million, streamline the online buying experience, and adopt more dynamic pricing.
Those aren’t small asks, but they mirror what interim management has already started discussing.
The engagement so far has been described as “collaborative and friendly” by both sides, which is a good sign.
CarMax’s executive chair, Tom Folliard, called the conversations with Starboard “productive.”
The turnaround story is still early, and risks remain.
But with a new CEO arriving, an activist pushing for change, and CarMax stock trading near multi-year lows, the setup is starting to look more interesting for long-term investors.
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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!
