Analysts Lower CarMax Projections Following Weak Earnings Report

Author: Addison Perry Updated: 09-26-2025 01:31 PM

Overview of CarMax's Recent Performance

CarMax Inc (NYSE: KMX) has faced some challenges recently, particularly following its second-quarter announcement, which fell short of expectations. The used-car retail leader reported earnings per share of 64 cents, a significant miss compared to the consensus forecast of $1.09. Additionally, the company's quarterly sales totaled $6.594 billion, which is a 6% decline year-over-year, missing estimates of $7.024 billion.

Details of the Earnings Report

The latest figures reveal a decline in CarMax's vehicle procurement, with a total of 293,000 vehicles purchased in the second quarter — a 2.4% drop compared to the previous year. Of these, 262,000 were acquired from consumers, down 2.7%, while purchases from dealers saw a slight increase of 0.2%, totaling 31,000 vehicles.

Insights from the CEO

In light of these results, Bill Nash, president and chief executive officer of CarMax, expressed confidence in the company's long-term strategy despite the ongoing challenges. He reassured investors of the robust earnings model that CarMax has been cultivating over the years.

Impact on Stock Performance

After the release of these earnings, CarMax's stock experienced a minor decline of 0.4%, closing at $45.41. Analysts promptly reacted to the news, adjusting their price targets and outlook for the company.

Price Target Adjustments by Analysts

Chris Pierce from Needham kept a Buy rating on CarMax but revised the price target significantly down from $92 to $60.
Michael Montani at Evercore ISI downgraded CarMax from Outperform to In-Line, lowering the price target from $80 to $52.
Craig Kennison from Baird maintained an Outperform rating but pares back the price target from $90 to $60.
RBC Capital's Steven Shemesh also left the rating as Outperform while slashing the target price from $81 to $59.
Lastly, Truist Securities analyst Scot Ciccarelli opted for a Hold stance, adjusting the target from $74 down to $47.

Looking Ahead: Analysts' Sentiments

With these downward adjustments, potential investors might wonder about the advisability of purchasing KMX stock at this moment. Analysts are currently providing mixed signals; while some maintain optimistic long-term views, the immediate outlook appears more guarded.

What to Consider Before Investment

If you are contemplating purchasing KMX shares, it's important to consider the company's recent performance along with analysts' revised sentiment. The future trajectory of CarMax will largely depend on its ability to navigate current market challenges and adapt to customer needs.

Frequently Asked Questions

What caused CarMax's earnings to fall short of expectations?

The earnings fell short largely due to lower-than-expected vehicle sales and procurement, resulting in weaker overall financial performance.

What do analysts think about the future of CarMax?

Analysts have mixed opinions; some are optimistic about the long-term strategy, while others are more cautious following the recent earnings report.

How did CarMax's stock perform after the earnings report?

CarMax's stock experienced a slight decline of 0.4%, closing at $45.41 on the day following the earnings announcement.

Which analysts changed their price targets for CarMax?

Analysts from Needham, Evercore ISI, Baird, RBC Capital, and Truist Securities all adjusted their price expectations for CarMax following the earnings report.

Is CarMax a good investment right now?

Investment decisions should consider both the recent underperformance and analysts' revised outlook, which suggests caution for potential investors.

About The Author

Hello, I'm 30-year-old financial writer and expert Addison Perry, and I love to simplify the intricacies of the financial industry. I've committed myself over the years to deciphering the subtleties of investing techniques and economic trends and converting them into doable guidance that anybody can use. My goal with writings and books is to make money interesting and approachable so that readers may take charge of their financial futures.

My enthusiasm to empowerment and education has propelled me through my career in finance. I write because I think that everyone should be able to make educated financial decisions, and I try to provide that. Regardless of experience level with investing, my work is intended to provide insightful analysis and practical advice to enable you to thrive in the always changing financial environment. I appreciate you traveling with me toward success and financial literacy.

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