CarMax Inc (KMX)

FairStock Score: 28/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach CarMax as a Graham-style balance-sheet and earnings exercise. It sells used vehicles and related finance, a cyclical, competitive business with no obvious wide moat. The filed numbers show why the market is uneasy: fiscal 2026 ended 2026-02-28 produced revenue $25.9B, net income $247.3M, and diluted EPS $1.68, down from fiscal 2025 net income $500.6M and EPS $3.21. The latest filed quarter, fiscal Q2 2027 ended 2026-08-31, did improve year over year: revenue $7.9B, net income $165.3M, EPS $1.16 versus fiscal Q2 2026 revenue $6.6B, net income $95.4M, EPS $0.64. Still, FairStock's calculated ROE of 3.59% and ROCE of 1.56% are thin, and debt-to-equity of 3.08 with an Altman Z-score of 0.90 is a real caution. Free cash flow is the bright spot: $994.3M trailing, a 13.8% FCF yield. On price at the 2026-10-13 close of $50.81, FairStock calculates P/E 31.56, P/B 1.18, EV/EBITDA 16.17, and Graham Number $39.52, leaving a negative margin of safety of -28.57%. The Lynch category is SLOW GROWER - Shrinking, with profits down about 19.8% a year over five years. I see a cash-generative but low-return, leveraged retailer whose price already anticipates recovery. Until earnings and returns improve, the margin of safety is not there.

In plain English: CarMax sells used cars and related financing. The business looks weak right now: profits have fallen sharply and returns on money are low, though it still produces a lot of cash. At $50.81, the price looks expensive compared with current profits and accounting value, and it is above a conservative value estimate.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2027 10-Q (period ended 2026-08-31) · fiscal Q1 2027 10-Q (period ended 2026-05-31) · fiscal Q3 2026 10-Q (period ended 2025-11-30) · fiscal Q2 2026 10-Q (period ended 2025-08-31) · FY2026 10-K (period ended 2026-02-28) · FY2025 10-K (period ended 2025-02-28) · FY2024 10-K (period ended 2024-02-29)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer