CarMax (NYSE:KMX) Downgraded to “Sell” Rating by Wall Street Zen

CarMax (NYSE:KMX) was downgraded by equities researchers at Wall Street Zen from a “hold” rating to a “sell” rating in a research note issued on Saturday.

A number of other research firms have also weighed in on KMX. Morgan Stanley set a $35.00 target price on shares of CarMax in a report on Monday, December 8th. Evercore boosted their price objective on CarMax from $38.00 to $40.00 and gave the stock an “in-line” rating in a report on Tuesday, February 3rd. Truist Financial raised their target price on CarMax from $35.00 to $37.00 and gave the company a “hold” rating in a report on Thursday, December 18th. Royal Bank Of Canada lifted their target price on CarMax from $34.00 to $37.00 and gave the company a “sector perform” rating in a research report on Friday, December 19th. Finally, Evercore ISI set a $42.00 price target on CarMax in a research report on Tuesday. One research analyst has rated the stock with a Strong Buy rating, one has assigned a Buy rating, twelve have issued a Hold rating and five have given a Sell rating to the company. Based on data from MarketBeat, the company has an average rating of “Reduce” and an average price target of $40.07.

CarMax Price Performance

Shares of KMX opened at $41.38 on Friday. The business’s fifty day moving average is $43.18 and its 200 day moving average is $46.75. CarMax has a 12-month low of $30.26 and a 12-month high of $89.47. The company has a quick ratio of 0.51, a current ratio of 1.99 and a debt-to-equity ratio of 2.74. The stock has a market cap of $5.87 billion, a P/E ratio of 13.66, a P/E/G ratio of 0.98 and a beta of 1.35.

CarMax (NYSE:KMX) last announced its quarterly earnings results on Thursday, December 18th. The company reported $0.43 EPS for the quarter, beating analysts’ consensus estimates of $0.31 by $0.12. CarMax had a net margin of 1.77% and a return on equity of 7.72%. The business had revenue of $5.79 billion during the quarter, compared to analyst estimates of $5.66 billion. During the same quarter in the previous year, the business posted $0.81 EPS. CarMax’s quarterly revenue was down 6.9% on a year-over-year basis. Sell-side analysts anticipate that CarMax will post 3.23 earnings per share for the current fiscal year.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of KMX. Norges Bank bought a new position in CarMax in the 4th quarter valued at $159,232,000. AQR Capital Management LLC boosted its holdings in shares of CarMax by 195.3% in the 2nd quarter. AQR Capital Management LLC now owns 4,457,340 shares of the company’s stock worth $298,107,000 after buying an additional 2,947,996 shares during the last quarter. Arrowstreet Capital Limited Partnership grew its position in CarMax by 1,410.5% during the second quarter. Arrowstreet Capital Limited Partnership now owns 2,028,718 shares of the company’s stock valued at $136,350,000 after buying an additional 1,894,408 shares during the period. The Manufacturers Life Insurance Company increased its holdings in CarMax by 795.5% during the second quarter. The Manufacturers Life Insurance Company now owns 1,846,406 shares of the company’s stock worth $124,097,000 after buying an additional 1,640,219 shares during the last quarter. Finally, Vulcan Value Partners LLC raised its position in CarMax by 135.2% in the third quarter. Vulcan Value Partners LLC now owns 2,328,120 shares of the company’s stock worth $104,569,000 after acquiring an additional 1,338,134 shares during the period.

Key Stories Impacting CarMax

Here are the key news stories impacting CarMax this week:

• Positive Sentiment: New CEO with digital and customer-focus credentials — Keith Barr, who led IHG Hotels & Resorts, will become CarMax’s CEO on March 16; investors hope his hospitality/digital background can accelerate omnichannel improvements and customer experience upgrades that could stabilize sales and margins. Keith Barr Takes CarMax Helm As Digital And Customer Focus Deepens
• Positive Sentiment: Market narrative shift toward a turnaround plan — major outlets report the hire as signaling a strategic pivot to digital and service-led differentiation, which can be seen as a credible first step to rebuild investor confidence. CarMax Taps Hotel Veteran to Lead Turnaround
• Neutral Sentiment: Formal appointment and board changes — CarMax issued an official press release confirming Barr’s appointment, the effective date (March 16), and board role shifts (interim CEO returning to director duties). This clarifies succession but is procedural. CarMax Names Keith Barr as Chief Executive Officer
• Neutral Sentiment: Media skepticism on fit — several outlets note Barr isn’t an auto-industry executive, framing the hire as unconventional; that raises questions about how transferable his hotel/digital playbook will be to used-car retail. CarMax Names a New CEO. He’s Not a Car Guy.
• Negative Sentiment: Analyst maintains bearish view — J.P. Morgan’s Rajat Gupta kept a Sell rating citing elevated execution risk and intensifying competition from online rivals like Carvana, arguing a new CEO alone may not be enough to reverse margin pressure or lower inventory risk quickly. CarMax: Elevated Execution Risk and Intensifying Carvana Competition Justify Sell Rating Despite New CEO
• Negative Sentiment: Recent sharp share decline and fundamental headwinds — commentary and reporting highlight a recent plunge in the stock tied to falling demand and worries about the company’s ability to execute a turnaround, underscoring that investor optimism may be tenuous until operational results improve. Why CarMax Stock Just Crashed

CarMax Company Profile

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.