Zacks Research Has Optimistic View of CarMax FY2027 Earnings

CarMax, Inc. (NYSE:KMX) – Stock analysts at Zacks Research increased their FY2027 earnings estimates for CarMax in a research note issued to investors on Wednesday, July 1st. Zacks Research analyst Team now anticipates that the company will post earnings of $2.58 per share for the year, up from their prior estimate of $2.24. The consensus estimate for CarMax’s current full-year earnings is $2.64 per share. Zacks Research also issued estimates for CarMax’s Q4 2027 earnings at $0.26 EPS, Q2 2028 earnings at $0.95 EPS, Q3 2028 earnings at $0.82 EPS, FY2028 earnings at $2.96 EPS, Q1 2029 earnings at $0.98 EPS and FY2029 earnings at $3.21 EPS.

CarMax (NYSE:KMX) last issued its earnings results on Wednesday, June 17th. The company reported $1.31 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.96 by $0.35. CarMax had a net margin of 0.84% and a return on equity of 6.64%. The company had revenue of $8.01 billion during the quarter, compared to analysts’ expectations of $7.42 billion. During the same period last year, the company posted $1.38 earnings per share. The firm’s quarterly revenue was up 6.2% compared to the same quarter last year.

KMX has been the subject of several other reports. Morgan Stanley lifted their price objective on CarMax from $35.00 to $44.00 and gave the stock an “equal weight” rating in a report on Tuesday, June 23rd. Mizuho lifted their price target on CarMax from $38.00 to $43.00 and gave the stock a “neutral” rating in a research note on Thursday, June 18th. UBS Group increased their price objective on shares of CarMax from $42.00 to $57.00 and gave the company a “neutral” rating in a research note on Tuesday, June 23rd. Wall Street Zen raised shares of CarMax from a “sell” rating to a “hold” rating in a report on Saturday, June 13th. Finally, Argus raised shares of CarMax to a “hold” rating in a research note on Thursday, April 16th. Two investment analysts have rated the stock with a Buy rating, thirteen have issued a Hold rating and five have given a Sell rating to the company’s stock. According to data from MarketBeat.com, CarMax has an average rating of “Reduce” and an average target price of $47.73.

CarMax Price Performance

Shares of NYSE:KMX opened at $50.88 on Friday. The firm has a market capitalization of $7.22 billion, a price-to-earnings ratio of 33.25, a price-to-earnings-growth ratio of 1.70 and a beta of 1.17. The company has a debt-to-equity ratio of 2.87, a current ratio of 2.70 and a quick ratio of 0.82. The business’s 50 day simple moving average is $44.44 and its 200-day simple moving average is $43.45. CarMax has a 12 month low of $30.26 and a 12 month high of $71.99.

Institutional Investors Weigh In On CarMax

Several hedge funds have recently made changes to their positions in the business. Silver Heights Capital Management Inc increased its stake in shares of CarMax by 39.5% during the 3rd quarter. Silver Heights Capital Management Inc now owns 926,167 shares of the company’s stock valued at $41,557,000 after acquiring an additional 262,478 shares during the last quarter. Freestone Capital Holdings LLC purchased a new position in shares of CarMax during the 4th quarter worth about $968,000. Dimensional Fund Advisors LP boosted its position in shares of CarMax by 33.2% in the third quarter. Dimensional Fund Advisors LP now owns 3,685,201 shares of the company’s stock worth $165,358,000 after acquiring an additional 918,553 shares during the last quarter. Rings Capital Management LLC grew its holdings in CarMax by 71.6% in the third quarter. Rings Capital Management LLC now owns 1,074,000 shares of the company’s stock valued at $48,190,000 after purchasing an additional 448,000 shares during the period. Finally, SG Americas Securities LLC grew its holdings in CarMax by 324.3% in the fourth quarter. SG Americas Securities LLC now owns 177,754 shares of the company’s stock valued at $6,868,000 after purchasing an additional 135,858 shares during the period.

Insider Activity at CarMax

In other news, Director Sona Chawla bought 2,000 shares of CarMax stock in a transaction on Thursday, June 25th. The shares were bought at an average cost of $53.39 per share, for a total transaction of $106,780.00. Following the acquisition, the director owned 21,702 shares in the company, valued at approximately $1,158,669.78. This trade represents a 10.15% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at the SEC website. Also, CEO Keith Barr bought 9,400 shares of CarMax stock in a transaction on Monday, June 22nd. The stock was purchased at an average price of $53.01 per share, for a total transaction of $498,294.00. Following the completion of the acquisition, the chief executive officer owned 33,375 shares in the company, valued at $1,769,208.75. This represents a 39.21% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. In the last quarter, insiders bought 13,900 shares of company stock valued at $735,574. 1.01% of the stock is owned by insiders.

Key Headlines Impacting CarMax

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: Zacks Research raised several CarMax earnings estimates, including FY2027 to $2.58 per share from $2.24 and FY2028 to $2.96 from $2.86, signaling improved expectations for profitability. CarMax stock page
• Positive Sentiment: Analysts also increased Q4 2027, Q2 2028, and Q3 2028 EPS forecasts, suggesting confidence in CarMax’s earnings trajectory over the next few years. CarMax stock page
• Positive Sentiment: Four CarMax directors reportedly bought shares after the company’s first-quarter earnings report, which can be viewed as a sign of internal confidence in the turnaround. Barrons article: CarMax’s Turnaround Is a Work in Progress, but Insiders Are Buying Anyway
• Neutral Sentiment: CarMax’s latest reported quarter beat expectations, with EPS of $1.31 versus $0.96 expected and revenue of $8.01 billion versus $7.42 billion estimated, providing a solid operational backdrop for the stock.
• Neutral Sentiment: Some longer-dated estimates were trimmed, including Q2 2027, Q3 2027, Q1 2028, and Q4 2028, plus a cut to FY2029 EPS, which tempers the more bullish near-term revisions. CarMax stock page
• Negative Sentiment: Zacks Research lowered FY2029 EPS estimates to $3.21 from $3.95, indicating some caution about CarMax’s very long-term earnings power. CarMax stock page

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.