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FRESH Analysis Report
Jun 21, 2026
5 days ago · 57% complete · +8 refreshed

CarMax, Inc.

KMX NYSE Categories PDF
Consumer Cyclical · Auto - Dealerships
Richmond, VA 23238, United States IPO 1997 carmax.com Updated Jun 21, 12:29pm
Price
$53.66
Market Cap
$7.6B
Employees
30,048
Beta
1.20
Avg Volume
3,532,674
CEO
Keith Barr
Business Description

CarMax, Inc., together with its associated entities, functions as a prominent purveyor of previously owned automobiles across the United States. Its business operations are strategically structured into two principal divisions: CarMax Sales Operations and CarMax Auto Finance. Through its retail offerings, the company provides an extensive selection of pre-owned vehicles, including various domestic, imported, and luxury models, in addition to hybrid and electric options. Customers also have the opportunity to purchase extended protection plans at the time of their vehicle acquisition. Separately, CarMax sells older, higher-mileage vehicles—typically around ten years old with over 100,000 miles—via wholesale auctions. Furthermore, CarMax delivers reconditioning and repair services for its vehicles. For its retail clients, the company facilitates a range of financing alternatives designed to accommodate diverse credit profiles, managed both by its internal CarMax Auto Finance segment and through arrangements with various external financial institutions. As of February 28, 2022, CarMax operated a network comprising approximately 230 retail locations specializing in used cars. Founded in 1993, CarMax, Inc. maintains its corporate headquarters in Richmond, Virginia.

Business History
Generated: Jun 21, 2026 12:32pm
Price Overview
Last updated: Jun 21, 2026 2:11pm (5d ago)
$53.66
+6.23 (+13.14%)
Day Range
$47.73 – $53.93
52-Week Range
$30.26 – $71.99
50-Day MA
$42.39
200-Day MA
$43.49
Volume
7,330,039.00
Analyst Price Targets
Low $37.00
Consensus $47.88
High $66.00
(79 analysts)
Share Structure
Outstanding 141,821,000.00
Float 131,221,925.00
Free Float 92.5%
High free float — 92.5% of shares trade freely, ~7.5% held by insiders/institutions
Very liquid — most shares trade freely. Low insider ownership can mean less management alignment, but makes large position sizing straightforward.
Price History (1 Year)
Last updated: Jun 21, 2026 2:17pm (5d ago)
Revenue & Net Income Trend
The directional story — useful even when net income is negative.
Last updated: Jun 21, 2026 2:17pm (5d ago)
Revenue
The top line — total sales before any costs or taxes are subtracted. A measure of how much business the company is doing.
Net Income
The bottom line — profit left after subtracting all expenses, interest, and taxes from revenue. Reflects accounting profitability, but includes non-cash items like depreciation, so it isn't the same as cash earned.
Operating Cash Flow
The real cash generated by the day-to-day business — selling products, paying suppliers, collecting from customers. Calculated from net income by adding back non-cash items and adjusting for timing (unpaid bills, unsold inventory). When OCF consistently lags net income, the reported profit may not be converting to real money.
Period Revenue Net Income Net Margin YoY/QoQ
Key Metrics
API Direct from provider CALC Derived from statements
Industry comparison last run: Jun 21, 2026 2:13pm
P/E Ratio (Price per dollar of earnings)
API
Stock Price / EPS (Diluted)
34.20
Stock Price: $53.66
EPS (Diluted): 1.68
P/B Ratio (Price vs net asset value)
API
Stock Price / Book Value Per Share
1.08
Stock Price: $53.66
Total Equity: $5.89B
Shares: 147,613,000
EV/EBITDA (Total value vs operating profit)
API
Enterprise Value / EBITDA
19.88
Market Cap: $7.61B
Total Debt: $17.26B
Cash: $122.83M
EBITDA: $1.61B
Enterprise Value (Takeover price (cap + debt - cash))
API
Market Cap + Total Debt - Cash
$24.0B
Market Cap: $7.61B
Total Debt: $17.26B
Cash: $122.83M
Gross Margin (Revenue left after direct costs)
API
Gross Profit / Revenue
10.8%
Gross Profit: $2.81B
Revenue: $25.88B
Operating Margin (Revenue left after all operations)
API
Operating Income / Revenue
-1.6%
Operating Income: -$409.76M
Revenue: $25.88B
Net Margin (Revenue left as actual profit)
API
Net Income / Revenue
1.0%
Net Income: $247.29M
Revenue: $25.88B
ROE (Profit from shareholder equity)
API
Net Income / Total Equity
3.7%
Net Income: $247.29M
Total Equity: $5.89B
ROIC (Profit from all invested capital)
API
NOPAT / Invested Capital
-0.9%
Operating Income: -$409.76M
Tax Rate: 35.5%
Equity: $5.89B
Total Debt: $17.26B
Cash: $122.83M
Current Ratio (Can it pay short-term bills)
API
Current Assets / Current Liabilities
2.20
Current Assets: $5.31B
Current Liabilities: $2.41B
Debt/Equity (Leverage — debt vs equity)
CALC
Total Debt / Total Equity
2.93
Short-Term Debt: $0.00
Long-Term Debt: $17.26B
Total Debt: $17.26B
Total Equity: $5.89B
Rev/Share (Top-line per share)
CALC
Revenue / Shares Outstanding
$175.33
Revenue: $25.88B
Shares: 147,613,000
Book Value/Share (Net assets per share)
CALC
(Total Assets - Total Liabilities) / Shares
$39.89
Total Equity: $5.89B
Shares: 147,613,000
FCF/Share (Real cash generated per share)
CALC
(Operating Cash Flow + CapEx) / Shares
$8.42
Operating CF: $1.78B
CapEx: -$540.99M
Shares: 147,613,000
CapEx is negative (outflow) — added to OCF to get FCF
Div Yield (Annual income from holding)
API
Last Annual Dividend / Stock Price
0.0%
Last Dividend: N/A
Stock Price: $53.66
Payout Ratio (Earnings paid out as dividends)
Dividends Paid / Net Income
—
Dividends Paid: N/A
Net Income: $247.29M
Dividends paid not available in cash flow statement
Industry Benchmarks
Last run: Jun 21, 2026 2:13pm
Compares KMX against LLM-researched typical ranges for its industry. One research call per industry, cached indefinitely — every stock in the same industry reuses the same baseline.
Advanced Analysis Forensic deep-dive · three lenses
Three separate reads — Company Quality (is it a great business?), Valuation (is it mispriced?), and General Sentiment (how macro + narrative are pushing it), kept deliberately apart · 2026-06-21 14:19:08
Delvantic - Cairn AI
Quality wobble + modestly cheap — patient starter, wait for mid-$40s to scale 6/10
A mediocre-but-cash-generative used-car franchise that's only modestly cheap with a slow-bleed sentiment tape — interesting in the mid-$40s, not here.
The cruxWhether CAF credit and retail operating margins stabilize before the analyst/narrative drip-feed pushes the stock into the price zone where the margin of safety actually gets fat.
Forensic checks Derived mechanically from KMX's filed financials — not from the AI lenses
Liquidity & RunwaySelf-Funding
DilutionShare Count Shrinking
Earnings QualityAdequate / Mixed
The three lensesswitch a tab for its full read — score + evidence
Company Quality
-31
Mixed
edge √Σ 91 · risk √Σ 122 · conf 6/10

CarMax is a mature, scaled used-vehicle retailer running ~$26B revenue with thin retail economics — gross margin 10.8%, operating margin -1.6% in the latest year, and net income of just $247M, down from $1.15B in 2022. Revenue has contracted four years running ($31.9B → $25.9B) and operating margin has been negative or near-zero since 2023. The business throws off real cash ($1.24B FCF latest year), but FCF is volatile (-$2.86B, +$0.86B, -$7M, +$157M, +$1.24B over five years) because it's distorted by changes in the auto-finance receivables book — this is a captive lender as much as a retailer.

Capital allocation is shareholder-friendly: diluted shares fell from 165.2M to 147.6M (-2.8% CAGR), SBC is a trivial 0.4% of revenue, and buybacks ran 3.8x SBC. Earnings quality looks acceptable on accruals (1% of assets) and OCF/NI of 1.97x, and the Beneish M of -2.7 shows no manipulation flag. The Altman Z of 1.5 in 'distress' is misleading here — KMX's $17B+ of debt is overwhelmingly non-recourse auto-finance funding (securitizations) against receivables, not corporate leverage, so Z-score is the wrong tool.

The core quality question: is the margin collapse cyclical (used-vehicle pricing reset post-COVID) or structural (Carvana and digital competitors permanently compressing economics)? Volumes, unit economics, and CAF (CarMax Auto Finance) credit performance — not in this dataset — decide that. Insider tape is mostly routine equity awards and tax withholding; the 'net buying' flag overstates conviction.

Strengths 3
m70
Disciplined share count reduction
Diluted shares down from 165.2M to 147.6M (-2.8% CAGR), with buybacks at 377% of SBC and SBC only 0.4% of revenue — per-share value is being concentrated.
m55
Real cash generation in latest year
$1.24B FCF on $25.9B revenue and OCF/NI of 1.97x suggests reported earnings convert to cash; accruals of just 1% of assets and Beneish M of -2.7 show no earnings-management flags.
m20
Insider activity benign but not a strong signal
Recent tape is entirely A-Awards and F-InKind tax withholdings — no open-market P buys in the snippet shown. The 'net buying' headline overstates the signal.
Concerns 5
m75
Operating margin collapse
Operating margin went from +1.7% in 2022 to -0.8%/-0.8%/-1.6% in the last three years. Net income fell from $1.15B to $247M — a 78% decline — while revenue fell only 19%, signaling operating deleverage on a high-fixed-cost retail footprint.
m60
Four consecutive years of revenue contraction
Revenue $31.9B → $29.7B → $26.5B → $26.4B → $25.9B. Even if partly price-driven (used-vehicle deflation), the business is not growing and unit economics have not recovered.
m50
FCF volatility from finance book
FCF swung from -$2.86B to +$1.24B over five years. Much of KMX's cash flow is dictated by CAF receivables growth and securitization timing, not retail operations — quality of cash flow is lower than headline.
m45
Heavy debt load tied to captive finance
Net debt of $17.1B against $7.6B market cap. While most is likely non-recourse securitization debt against auto loans, it exposes the company to credit losses and funding-cost shocks — a meaningful structural risk.
m35
Competitive pressure from digital-native rivals
The margin trajectory is consistent with Carvana and online competitors pressuring KMX's historical moat (scale, reconditioning, financing). Inference, not in data.
This is a once-great franchise that's gotten mediocre. The retail business is barely profitable on an operating basis — three straight years of negative operating margin — and four years of revenue contraction suggests the moat is being chipped at by digital competitors. The saving grace is genuine cash generation, very clean accounting, and management that has used cash to shrink the share count by ~11% in four years rather than diluting. But the balance sheet is wrapped around a captive lender, which is fine when used-car credit performs and dangerous when it doesn't. I'd call this Mixed leaning Solid — a real business with real cash flow, but the operating trajectory is going the wrong way and the quality verdict hinges entirely on whether the margin collapse is cyclical or structural. Not a fortress, not fragile, but clearly off its prior form.
Verify before trusting this (7)
  • Split of $17B debt between non-recourse warehouse/securitization debt vs corporate recourse debt (10-K debt footnote)
  • CAF loan-loss provisioning trend and net charge-off rate — is credit performance deteriorating?
  • Unit sales volume trend (retail + wholesale units) to separate price vs volume in the revenue decline
  • Gross profit per unit retail trend — the key unit economic that drives the franchise
  • SG&A as % of gross profit — to see if cost structure is being right-sized to lower volumes
  • Capex plans for store growth vs maintenance, and any digital/omnichannel investment burden
  • Market share trends vs Carvana and franchised dealers
Valuation / Mispricing
+0
Modestly Cheap
edge √Σ 65 · risk √Σ 65 · conf 5/10
Price $53.66 vs composite FV $74.05 (~38% upside on paper); after quality haircut deserved value is closer to $62-65, leaving a ~15-20% real margin of safety. attractive below $46.00

The e2e composite pegs fair value at $74.05, implying ~38% upside from $53.66. That's a meaningful gap on paper, but the Company-Quality lens flagged a -31 quality score with three years of negative operating margin and four years of revenue contraction. A franchise whose retail operations are barely profitable doesn't deserve a clean multiple, so I haircut that $74 deserved value toward the low-$60s. Against that, $53.66 still looks modestly cheap — call it ~15-20% margin of safety rather than 38%.

What's priced in at $53.66: the market is assuming used-car economics stay pressured, the captive finance book continues to absorb credit losses, and operating margins don't snap back quickly. What's NOT priced in: any meaningful normalization of unit economics, or the optionality from continued buybacks shrinking the float. The bear case (residual value collapse, subprime delinquencies in CAF) is plausible enough that I won't call this Undervalued — but it's not Fairly Valued either. There's a gap, just smaller than the headline FV suggests.

Cheap signals 2
m55
Composite FV $74 vs price $53.66
E2e synthesis pegs fair value 38% above market. Even with a meaningful haircut for deteriorating retail margins, the gap survives.
m35
Buybacks compounding the per-share math
Quality lens notes disciplined share count reduction. Continued cash deployment into a depressed stock mechanically lifts per-share deserved value.
Rich / priced-in 3
m45
Operating margins have collapsed — deserved value must be haircut
Three straight years of negative operating margin in the retail business. A franchise earning sub-par returns doesn't deserve the same multiple the composite likely embeds, trimming real FV toward the low-$60s.
m40
Captive finance is a hidden liability, not an asset
Heavy balance-sheet leverage to CAF means subprime credit deterioration hits both earnings and book value. Market is right to demand a discount until delinquency trends stabilize.
m25
Revenue contracting four years running
Top-line shrinkage signals the moat is being eroded by Carvana and digital-native competitors — a structural headwind the DCF may underweight.
There's a real gap here but it's not a fat pitch. The $74 FV is too generous given the business has genuinely gotten worse — I'd anchor deserved value in the low-$60s, which makes $53.66 modestly cheap with maybe 15-20% upside. That's interesting but not compelling given the bear case has teeth (CAF credit, structural revenue decline). I'd want this in the mid-$40s before backing up the truck — at that level the margin of safety is fat enough to absorb a worse-than-expected credit cycle.
Verify before trusting this (5)
  • CAF loss provisions and delinquency rates in latest 10-Q — is the credit cycle turning or worsening?
  • Retail GPU (gross profit per unit) trend — any sign of pricing power returning?
  • Unit volume guidance and SG&A leverage — operating margin path back to positive
  • Pace and price of buybacks in the most recent quarter
  • Management commentary on used-car residual values and affordability
General Sentiment
-53
Headwind
tail √Σ 36 · head √Σ 89 · conf 7/10

The macro tape is only mildly positive (regime +20, VIX 16.8), so it isn't doing much work in either direction. With a 1.2 beta and consumer-cyclical/auto-dealership exposure, KMX is more sensitive to rate-and-credit narratives than to the broad index, and the 10y at 4.46% with stretched market multiples keeps a low-grade headwind on the whole used-car-credit complex. This is a name where the macro lands harder than the regime score suggests because the bear story IS a rates-and-credit story.

The dominant pressure is the narrative: a fragile 'fallen-angel' archetype with low cult coefficient and a bear thesis (CAF delinquencies, residual-value reset, subprime stress) that maps directly onto current macro anxieties. Intensity is only moderate, but durability is fragile — meaning sentiment can deteriorate quickly on any soft data point. Analyst tone confirms the drift: consensus Hold, target $47.88 sits ~11% BELOW spot $53.66, and 8 revisions this month averaged $46.13 — analysts are actively cutting into a stock that has rallied above their marks. That divergence (price above falling targets) is a classic setup for downgrade-driven pressure.

Offsetting tailwinds are thin but real: momentum score is positive, D/E is improving, and the stock has held up — suggesting some quiet accumulation against the bear story. Net read: headwind, not strong headwind, because the macro tape isn't actively risk-off and the narrative intensity is only moderate.

Tailwinds 2
m30
Quiet positive momentum despite the bear story
Momentum score positive and stock trades above analyst targets — suggesting some buyers are leaning into the fallen-angel angle and absorbing the negative tone. Limits downside, doesn't flip it.
m20
Macro regime not actively risk-off
Regime score +20, VIX sub-17, S&P near highs. The tape isn't forcing indiscriminate selling of high-beta cyclicals — a benign backdrop that mutes (but doesn't erase) the narrative headwind.
Headwinds 3
m60
Analyst targets sit 11% below spot with fresh cuts
Consensus target $47.88 vs price $53.66, and 8 revisions this month averaged $46.13. Sell-side is actively marking the name down into strength — a steady drip-feed of negative headlines for a Hold-rated stock.
m55
Fragile fallen-angel narrative tied to credit stress
Bear story centers on CAF delinquencies, subprime deterioration, and residual-value reset — themes the market is primed to punish. Low cult coefficient means no loyal holder base to defend the tape on bad prints.
m35
Rate/credit macro lands harder on auto-finance exposure
10y at 4.46% and a 1.2 beta in a consumer-cyclical lender-adjacent name means even a neutral tape transmits as a mild drag; any uptick in VIX or curve stress would amplify quickly.
Net pressure is negative but not violent. The narrative is fragile and the bear case rhymes too cleanly with macro worries (rates, credit, subprime) for sentiment to turn constructive without a real data catalyst, and analysts are visibly cutting targets BELOW the current price — that's a slow-motion headwind that tends to keep a lid on rallies. The macro tape isn't actively hostile, and momentum is quietly positive, so this isn't a 'get out of the way' setup — it's a 'don't expect multiple expansion from sentiment' setup. I lean Headwind: the story is working against the stock more than the tape is working for it.
Verify before trusting this (5)
  • Next monthly used-vehicle SAAR and Manheim index print — a soft read accelerates the bear narrative
  • CAF delinquency/net-charge-off trend in the next earnings release — the linchpin of the bear story
  • Whether analyst targets continue dropping or stabilize near $46 (sustained cuts = headwind intensifies)
  • 10y yield direction and any credit-spread widening — KMX's beta to rates is high via CAF
  • Any sector rotation back into consumer cyclicals that would lift the whole cohort regardless of story
The market-wide tape + this name's exposure to it (beta / sector / narrative durability). Context on the non-fundamental pressure — not a call on the business or the price. processId: detail-general-sentiment
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Three lenses kept deliberately separate — Company Quality (price-agnostic), Valuation (price-conditional), and General Sentiment (non-fundamental macro/narrative pressure). The scores are not blended. Filing-level items (convertibles, lock-ups, customer concentration) are v2 — see each lens's "verify."
Deep Analysis
Last run: Jun 21, 2026 2:16:27 pm

Pre-flight intelligence scans the company first, then routes to the right analytical methods.

0 Company Classification — What type of company is this?
1 Industry Landscape — Where is the industry headed?
2 Company Momentum — Where is this company trending?
3 Forward Projection — 1Y & 2Y projected metrics (requires Layer 1 + 2)
4a DCF Valuation — Present value of future cash flows
4b Earnings Power Value — Floor value — worth with zero growth
4c Anchored PE — Industry PE adjusted for growth differential
4d Reverse DCF — What growth is the market pricing in?
4e Revenue-Based DCF — For growth/narrative companies (skip if mature earner)
Not applicable for Mature Earner companies
4f Anchored P/S — Price-to-Sales peer comparison (skip if mature earner)
Not applicable for Mature Earner companies
4g Scenario Analysis — Bull / Base / Bear (skip if mature earner)
Not applicable for Mature Earner companies
4h Dividend Discount Model — For dividend/income stocks only
Not applicable for Mature Earner companies
4i Book Value Analysis — For deep value / turnaround stocks only
Not applicable for Mature Earner companies
4j Insider Activity — Are insiders buying or selling?
4f Cash Flow Quality — How trustworthy is the FCF?
4g Debt Maturity Risk — Can it handle its debt?
4h Macro Environment — Rates, market valuation, volatility
4i Sector Intelligence — How does this company compare within its sector?
4j Revenue Confidence — How reliable is the growth projection?
4k Sensitivity Analysis — How fragile is the fair value estimate?
4l Sector Demand Cycle — Is the sector in a boom, steady state, or contraction?
5 AI Investigation — Adaptive research engine (Claude)
5b Thesis Evaluation — What does the market believe? (narrative/platform stocks only)
Not applicable for Mature Earner companies
6 Valuation Synthesis — Weighted verdict from all methods (requires Layer 4)
Income Statement (Annual)
Last updated: Jun 21, 2026 2:17pm (5d ago)
Metric 2022 2023 2024 2025 2026
Revenue $31.9B $29.7B $26.5B $26.4B $25.9B
Cost of Revenue $28.6B $26.9B $23.8B $23.5B $23.1B
Gross Profit $3.3B $2.8B $2.7B $2.9B $2.8B
Operating Expenses $2.7B $3.1B $2.9B $3.1B $3.2B
Operating Income $551.6M -$310.9M -$205.7M -$220.5M -$409.8M
Net Income $1.2B $484.8M $479.2M $500.6M $247.3M
EBITDA $2.1B $1.3B $1.7B $1.8B $1.6B
EPS $7.09 $3.05 $3.03 $3.22 $1.68
EPS (Diluted) — — — — —
Balance Sheet (Annual)
Last updated: Jun 21, 2026 12:32pm (5d ago)
Metric 2022 2023 2024 2025 2026
Cash & Equivalents $102.7M $314.8M $574.1M $247.0M $122.8M
Total Current Assets $6.5B $5.0B $5.2B $5.1B $5.3B
Total Assets $26.3B $26.2B $27.2B $27.4B $26.4B
Current Liabilities $2.0B $1.9B $2.3B $2.2B $2.4B
Long-Term Debt $18.2B $17.8B $18.0B $18.1B $17.3B
Total Liabilities $21.1B $20.6B $21.1B $21.2B $20.5B
Total Equity $5.2B $5.6B $6.1B $6.2B $5.9B
Retained Earnings $3.5B $3.7B $4.1B $4.3B $4.0B
Cash Flow (Annual)
Last updated: Jun 21, 2026 2:17pm (5d ago)
Metric 2022 2023 2024 2025 2026
Operating Cash Flow -$2.5B $1.3B $458.6M $624.4M $1.8B
Capital Expenditure -$308.5M -$422.7M -$465.3M -$467.9M -$541.0M
Free Cash Flow -$2.9B $860.6M -$6.7M $156.5M $1.2B
Acquisitions (net) -$229.3M $0 $0 $0 $0
Debt Repayment — — — — —
Dividends Paid — — — — —
Stock Buybacks -$576.5M -$333.9M -$94.1M -$428.5M -$642.8M
Net Change in Cash $31.7M $147.4M $299.4M -$290.1M -$97.5M
Analyst Estimates (Annual)
Last updated: Jun 21, 2026 12:29pm (5d ago)
Metric 2026 2027 2028 2029
Revenue $25.7B
$25.2B – $26.0B
 $26.9B
$26.3B – $28.1B
 $27.3B
$25.2B – $28.4B
 $27.5B
$27.5B – $27.6B
EBITDA $1.8B
$1.8B – $1.8B
 $1.9B
$1.9B – $2.0B
 $1.9B
$1.8B – $2.0B
 $2.0B
$2.0B – $2.0B
Net Income $398.4M
$387.2M – $409.7M
 $389.0M
$306.6M – $419.7M
 $424.2M
$348.0M – $501.4M
 $504.0M
$288.6M – $626.4M
EPS — — — —
Growth Trends (YoY %)
Last updated: Jun 21, 2026 2:17pm (5d ago)
Metric 2023 2024 2025 2026
Revenue Growth -6.9% -10.6% -0.7% -1.8%
Gross Profit Growth -14.8% -3.1% +6.8% -3.2%
Operating Income Growth -156.4% +33.8% -7.2% -85.8%
Net Income Growth -57.9% -1.1% +4.5% -50.6%
EBITDA Growth -36.2% +25.0% +10.2% -12.3%
Insider Trading (Recent)
Last updated: Jun 21, 2026 2:16pm (5d ago)
Type codes PPurchase SSale AAward / grant MOption exercise FIn-kind (tax) CConversion GGift DReturn to issuer
All SEC Form 4 codes
Open market
P Purchase
Open-market or private purchase of shares.
S Sale
Open-market or private sale of shares.
Compensation (Rule 16b-3)
A Award / grant
Grant or award of securities (RSUs, options, etc.) under Rule 16b-3.
D Return to issuer
Securities disposed back to the company under Rule 16b-3.
F In-kind (tax)
Shares withheld or delivered to pay the option-exercise price or tax — not an open-market sale.
I Discretionary
Discretionary transaction under an employee plan — Rule 16b-3(f).
M Option exercise
Exercise or conversion of a derivative (option/RSU) into shares — exempt.
Derivatives
C Conversion
Conversion of a derivative security into the underlying shares.
E Short expiration
Expiration of a short derivative position.
H Long expiration
Expiration or cancellation of a long derivative position with value received.
O OTM exercise
Exercise of an out-of-the-money derivative.
X ITM exercise
Exercise of an in-the-money or at-the-money derivative.
Other exempt
G Gift
Bona fide gift of securities.
L Small acquisition
Small acquisition under Rule 16a-6.
W Inheritance
Acquisition or disposition by will or the laws of descent.
Z Voting trust
Deposit into or withdrawal from a voting trust.
Other
J Other
Other acquisition or disposition (explained in a Form 4 footnote).
K Equity swap
Transaction in an equity swap or similar instrument.
U Tender / buyout
Disposition via tender of shares in a change-of-control transaction.

Compensation-plan codes (A, D, F, M) are routine and rarely directional. Open-market P (buy) and S (sale) carry the most signal.

Date Insider Type Shares Price Value
2026-06-25 Chawla Sona P-Purchase 2,000.00 $53.39 $106,780
2026-06-25 Shinder Marcella P-Purchase 574.00 $52.01 $29,854
2026-06-24 ONeil Mark F P-Purchase 4,800.00 $52.36 $251,328
2026-06-24 ONeil Mark F P-Purchase 4,800.00 $52.36 $251,328
2026-06-23 OShaughnessy Robert 0.00 $0.00 $0
2026-06-23 KESSLER JAMES FRANCIS 0.00 $0.00 $0
2026-06-23 COBB WILLIAM C 0.00 $0.00 $0
2026-06-23 FOLLIARD THOMAS J M-Exempt 14,855.00 $51.91 $771,123
2026-06-23 FOLLIARD THOMAS J F-InKind 3,618.00 $51.91 $187,810
2026-06-23 FOLLIARD THOMAS J M-Exempt 14,855.00 $0.00 $0
2026-06-22 Bensen Peter J P-Purchase 2,500.00 $52.20 $130,500
2026-06-22 Barr Keith P-Purchase 9,400.00 $53.01 $498,247
2026-05-01 Mayor-Mora Enrique N A-Award 22,898.00 $0.00 $0
2026-05-01 Mayor-Mora Enrique N F-InKind 1,015.00 $38.53 $39,108
2026-05-01 Daniels Jon G A-Award 14,655.00 $0.00 $0
2026-05-01 Daniels Jon G F-InKind 822.00 $38.53 $31,672
2026-05-01 Cafritz Diane L A-Award 22,898.00 $0.00 $0
2026-05-01 Cafritz Diane L F-InKind 1,015.00 $38.53 $39,108
2026-05-01 Stuckey John M III A-Award 10,075.00 $0.00 $0
2026-05-01 Stuckey John M III M-Exempt 1,183.00 $0.00 $0
Narrative Economics
The story the market is telling about this stock — the intangible X-factor (founder mythology, cult dynamics, TAM-of-imagination) that moves price beyond what cash flows alone explain. After Shiller, Narrative Economics.
No narrative profile yet for KMX — it's generated by the pipeline (market-narrative step).
Delvantic AI Findings
Independent analyst synthesis · Delvantic - Cairn AI · generated 2026-06-21 14:17:03
Reviews the pipeline's own verdicts
Verdict Fairly valued near $54 — synthesis overstates distress, narrative layer overstates $74 upside; range-bound $50-60 until Q2/Q3 confirm the May print wasn't a one-off, then re-rate.

Looking at the raw quarterly trajectory first: the May-2026 quarter just printed $8.01B revenue and $185.6M net income — that's a 14% YoY revenue jump versus the $7.01B in Aug-2024 comparable and easily the strongest quarter in the dataset. The Feb-2026 quarter's $120.7M loss is the outlier, not the trend. FY2026 annual revenue of $25.88B was down only 1.8% YoY but operating loss widened to -$409.8M — yet net income was still positive $247M, meaning CAF (the finance arm) is doing the heavy lifting while retail unit economics remain underwater. FCF of $1.24B on a $7.6B market cap is a 16% FCF yield, which is genuinely cheap if you believe it's repeatable. P/B at 1.08x is near tangible book.

The synthesis verdict calling this "Distressed/Turnaround facing structural obsolescence" and "potential insolvency" is, frankly, overcooked. CarMax generated $1.78B in operating cash flow last year and bought back stock; the balance sheet shows current ratio 2.2x; this is not a company circling the drain. The market-forces "Strong Headwinds / potential insolvency" call appears to be conflating CAF's on-balance-sheet auto loan debt (which is non-recourse-ish securitization funding, not corporate leverage) with true solvency risk. The fact that total debt is shown as "—" tells me the models may have flagged missing data as catastrophic when it's actually a disclosure/parsing gap. I'd push back hard on the insolvency framing.

That said, the bull case has its own holes. Revenue 3-year CAGR is -1.2% and earnings CAGR is -28%; FY2022's $1.15B net income (4.6% margins in a used-car bubble) is not the right anchor. Normalized earnings are probably closer to $500-600M (FY2024-25 run-rate), which on 15x puts fair value at $50-60 — i.e., roughly where it trades. The "$74 DCF fair value" cited in the narrative layer requires CAF spreads to recover and used-car GPU to mean-revert; both are plausible but not imminent given subprime delinquency trends and Carvana's resurgence eating share at the low end. ROIC of -0.86% TTM is the number that should bother bulls most — capital is not earning its cost right now. The 34x P/E is misleading on depressed earnings, but EV/EBITDA at 19.9x is not cheap on any read. Insider activity is all awards and in-kind tax withholding — labeling that "Net Insider Buying" is just wrong; there's no open-market conviction buy here.

The contrarian argument worth taking seriously: used-car retail is structurally lower-margin than it was in 2021-22 because price transparency has compressed dealer spreads permanently, and CAF's earnings quality depends on credit losses staying contained while subprime auto ABS spreads have been widening. If Q1's $8B/$186M print is the peak of a mini-cycle rather than the start of recovery, KMX earns $400-500M annually and deserves 12-14x = $48-60. The Q1 acceleration is real but one quarter doesn't make a trend, especially when Feb-2026 just lost money. I dissent from the synthesis's distress framing but I also dissent from the narrative layer's $74 anchor — both are reaching. Fair value is $50-58, and the stock at $53.66 is approximately correctly priced for a business with genuine cyclical recovery optionality offset by structural margin pressure. The 16% FCF yield is the only thing that makes me lean slightly constructive; if management keeps buying back stock at 1.08x book, per-share value compounds even with flat fundamentals.

GPT Critique
Second-opinion review · gpt-4o · generated 2026-06-21 14:17:11
Reviews the Opus findings above
Verdict I agree with Opus — fairly valued around $54, with a likely trading range of $50-60 until further earnings clarity. The FCF yield offers some price support, but structural pressures linger.

CarMax's recent financial data presents a mixed picture, with notable fluctuations in quarterly performance. The latest quarter ending May 2026 showed an impressive revenue of $8.01 billion and net income of $185.6 million, translating to a 2.3% margin. This appears to be an outlier given the previous quarter's $120.7 million loss on $5.95 billion revenue. The annual trend shows declining revenue from $31.90 billion in 2022 to $25.88 billion in 2026, indicating a revenue CAGR of -1.2% over these years. However, despite this decline, CarMax has maintained a positive net income, thanks to its finance arm, CarMax Auto Finance (CAF). The company's free cash flow of $1.24 billion on a $7.61 billion market cap suggests a 16% FCF yield, indicating potential undervaluation if sustainable. However, the operating loss of $409.8 million in fiscal 2026 suggests underlying challenges in core operations.

Opus argues that the synthesis verdict overstates the company's distress and potential insolvency, and I agree with this assessment. The current ratio of 2.2x and operating cash flow of $1.78 billion suggest that CarMax is not on the brink of insolvency. The concerns about structural obsolescence seem exaggerated given the robust cash flow and ongoing stock buybacks. However, I disagree with Opus's dismissal of the insider activity labeling as incorrect. While the recent transactions are indeed awards and tax withholdings, the lack of open-market purchases could still be seen as a lack of insider confidence in the stock's valuation.

Opus also suggests the $74 fair value in the narrative layer is overstated, citing the need for CAF spreads to recover and used-car gross profit per unit (GPU) to mean-revert. I concur with this skepticism. The used-car market dynamics have changed significantly, and while CAF contributes significantly to net income, the subprime delinquency trends pose risks that could hinder recovery. Additionally, the ROIC of -0.86% and the relatively high EV/EBITDA of 19.9x support the view that the stock is not cheap, aligning with Opus's fair value range of $50-58.

A skeptic might argue that both Opus and I are underestimating the potential for further margin compression in the used-car market due to increased competition and transparency, or overestimating the resilience of CAF's earnings amidst rising subprime delinquency rates. They might assert that without a substantial recovery in used-car margins or a stabilization in credit markets, CarMax's fair value could be even lower than our estimates.

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My Notes personal — only you see this
Data via Financial Modeling Prep · Cached for performance · fmp
v1.1.352 · d1100787 · 2026-06-26 11:39:30