# CarMax (KMX.US)

Canonical: https://gigainvestors.com/s/KMX

Analysis as of: 2026-10-16T07:29:39.941Z. Financial observations: FY1997–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $52.62 per share; close as of 2026-10-15.

Estimated value: low $23.46 per share, central $26.69 per share, high $31.00 per share. Buy at or below the central value $26.69 per share. Valuation as of 2026-10-16T07:29:39.941Z; scenarios are not confidence intervals.

Expected annual return: 6.5% at the stated quote. About 6.5% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 5 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 5

- Years with a net loss: 0

- Operating margin variation: 1.61×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.04×

- FY2018: 0.04×

- FY2019: 0.03×

- FY2020: 0.03×

- FY2021: 0.01×

- FY2022: 0.02×

- FY2023: -0.01×

- FY2024: -0.01×

- FY2025: -0.01×

- FY2026: -0.02×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 1.4%

- ROIC, second-lowest year: -1.0%

- Typical minus recent gross margin: 0.9 pp

- Typical gross margin (annual median): 11.8%

- Recent gross margin (lower of latest and 3-year median): 10.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.7%

- ROIC including acquisitions, ten-year median: 3.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 3.0%

- FY2018: 2.8%

- FY2019: 2.4%

- FY2020: 2.2%

- FY2021: 1.1%

- FY2022: 1.8%

- FY2023: -1.0%

- FY2024: -0.6%

- FY2025: -0.7%

- FY2026: -1.1%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 0.74×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $2.1B

- Net income, five-year total: $2.9B

- Return on incremental invested capital: -24.2%

- Working capital / revenue, annual change: 0.0 pp

- Working capital / revenue, change between three-year averages: 0.2 pp

- Working capital / revenue, final three-year average: 11.9%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.00×

- FY2023: 0.68×

- FY2024: 0.57×

- FY2025: 0.65×

- FY2026: 0.21×

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 2.8% vs -0.7%

- Per-share earnings: 3.26 to 3.02 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -3.3%

- Ordinary dilution, 5-year annual growth: -2.2%

- Market cap gain: -$5.9B

- Cumulative retained earnings: $2.2B

- Diluted shares, 10-year annual growth: -3.3%

- Diluted shares, 5-year annual growth: -2.2%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: -1.0%

- Per-share value change: -$0.24

- Per-share value, starting three-year median: $3.26

- Per-share value, ending three-year median: $3.02

- Buybacks concentrated in cheaper years (correlation): 0.53

- Average buyback yield: 4.5%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $242M

- Cumulative net income, 10 years: $6.6B

- ROIC, first three-year median: 2.8%

- ROIC, last three-year median: -0.7%

Chart: Earnings per share; fiscal year observations.

- FY2017: $3.26

- FY2018: $3.60

- FY2019: $4.79

- FY2020: $5.33

- FY2021: $4.52

- FY2022: $6.97

- FY2023: $3.03

- FY2024: $3.02

- FY2025: $3.21

- FY2026: $1.68

### accounting: pass

- Sloan accruals: -5.8%

- Receivables to sales index (DSRI): 1.10×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 5.6%

- Earnings backed by cash: Yes

- Operating cash / earnings: 7.21×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.02×

Chart: Sloan accruals; fiscal year observations.

- FY2017: 6.7%

- FY2018: 4.3%

- FY2019: 3.6%

- FY2020: 5.3%

- FY2021: 0.4%

- FY2022: 14.1%

- FY2023: -3.0%

- FY2024: 0.1%

- FY2025: -0.5%

- FY2026: -5.8%

## Holders

- [John Rogers](https://gigainvestors.com/AI): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Steven Romick](https://gigainvestors.com/FPA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Mark Hillman](https://gigainvestors.com/HCM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Thomas Gayner](https://gigainvestors.com/MKL): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [C.T. Fitzpatrick](https://gigainvestors.com/VVP): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 63% since Nov 2021 · "CarMax (KMX) Earnings Show Turnaround Progress, But Margin Pressure Remains" (finance.yahoo.com, Oct 2026) · sales -1.8%

Story as of 2026-10-16T09:59:01.543Z; price observation 2026-10-15.

Price needs cash profits to grow 9.4% a year for ten years

- 2025-04-10: CarMax Misses Fiscal Fourth-Quarter Earnings Estimates; Suspends Long-Term Target Timelines ([finance.yahoo.com](https://finance.yahoo.com/news/carmax-misses-fiscal-fourth-quarter-130712951.html))

- 2025-06-20: CarMax Profit Rises as Tariff Worries Spur Used-Car Demand ([finance.yahoo.com](https://finance.yahoo.com/news/carmax-posts-higher-profit-revenue-113500369.html))

- 2025-09-25: CarMax Stock Falls Sharply on Earnings as Used Car Sales and Prices Decline ([finance.yahoo.com](https://finance.yahoo.com/m/c0b9557f-574d-376d-a883-8da0615e3ee3/carmax-stock-falls-sharply-on.html))

- 2025-11-06: CarMax Cuts Ties With CEO, Expects Weak Third Quarter ([finance.yahoo.com](https://finance.yahoo.com/m/f4983fa7-1197-360f-832d-2479b1e1b9c8/carmax-cuts-ties-with-ceo%2C.html))

- 2026-04-15: CarMax Q4 Earnings Beat Estimates Despite Pricing-Driven Margin Hit ([finance.yahoo.com](https://finance.yahoo.com/news/carmax-q4-earnings-beat-estimates-121900651.html))

- 2026-06-17: CarMax shares drop as margin pressure overshadows strong quarterly results ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/carmax-shares-drop-margin-pressure-143400079.html))

### Sales · FY2025–2026

sales -1.8%; source https://www.sec.gov/Archives/edgar/data/1170010/000117001026000021/kmx-20260228.htm; observed 2026-04-15.

- FY2017: $16B 

- FY2018: $17B 

- FY2019: $18B 

- FY2020: $20B 

- FY2021: $19B 

- FY2022: $32B 

- FY2023: $30B 

- FY2024: $27B 

- FY2025: $26B 

- FY2026: $26B 

### Gross margin · FY2026

gross margin 10.8%; source https://www.sec.gov/Archives/edgar/data/1170010/000117001026000021/kmx-20260228.htm; observed 2026-04-15.

- FY2017: 13.8% 

- FY2018: 13.6% 

- FY2019: 13.6% 

- FY2020: 13.4% 

- FY2021: 12.6% 

- FY2022: 10.3% 

- FY2023: 9.4% 

- FY2024: 10.2% 

- FY2025: 11.0% 

- FY2026: 10.8% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in auto & truck dealerships; annual sales are USD 25.9 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1170010/000117001026000021/kmx-20260228.htm (filed 2026-04-15); FY2026: revenue 25881131000; grossProfit 2806593000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); KMX.US: CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. The company operates in two segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; wholesale auctions; extended protection plans to customers at the time of sale; and reconditioning and vehicle repair services. The CarMax Auto Finance segment provides financing alternatives for retail customers across a range of credit spectrum and arrangements with various financial institutions. The company was founded in 1993 and is based in Richmond, Virginia.

### Why customers stay

Margins ranged from 10.2% to 11% during 2024–26; it earns 1.4% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); FY2024: grossProfit / revenue = 10.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); FY2025: grossProfit / revenue = 11%.

- Source: https://www.sec.gov/Archives/edgar/data/1170010/000117001026000021/kmx-20260228.htm (filed 2026-04-15); FY2026: grossProfit / revenue = 10.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); 10-year return on capital observations [[2017,0.0296338590334247],[2018,0.02822598377493565],[2019,0.0241259481178025],[2020,0.021656211469404406],[2021,0.010686270408466179],[2022,0.017535934529337632],[2023,-0.00982636601948546],[2024,-0.006228530028960092],[2025,-0.006522994744608133],[2026,-0.011310306840139296]]; median 0.014111102468901906. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 5 of 10 years; bought back USD 642.8 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); FY2017: growth capex 100642720.86948043; upkeep 317501279.13051957; owner earnings 478343720.86948043. Growth capex / owner earnings = 0.21039833174049655.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); FY2018: growth capex 116874000; upkeep 179942000; owner earnings 664112000. Growth capex / owner earnings = 0.17598537596068134.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); FY2019: growth capex 122389000; upkeep 182247000; owner earnings 842413000. Growth capex / owner earnings = 0.14528384533477048.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); FY2020: growth capex 116085000; upkeep 215811000; cash acquisitions 0; owner earnings 888433000. Growth capex plus acquisitions / owner earnings = 0.13066263860077237.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); FY2021: growth capex 0; upkeep 164536000; cash acquisitions 0; owner earnings 824539000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); FY2022: growth capex 35346000; upkeep 273188000; cash acquisitions 241563000; owner earnings 1151297000. Growth capex plus acquisitions / owner earnings = 0.24051917098715622.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); FY2023: growth capex 0; upkeep 422710000; cash acquisitions 0; owner earnings 327276000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); FY2024: growth capex 0; upkeep 465307000; cash acquisitions 0; owner earnings 274311000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); FY2025: growth capex 0; upkeep 467939000; owner earnings 327418000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1170010/000117001026000021/kmx-20260228.htm (filed 2026-04-15); FY2026: growth capex 0; upkeep 540989000; owner earnings 52263000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); Dividend observations: [[2017,12584269000],[2018,14402177000],[2019,15208004000],[2020,18062943000],[2021,12559806000],[2022,0],[2023,0],[2024,0],[2025,0],[2026,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1170010/000117001026000021/kmx-20260228.htm (filed 2026-04-15); FY2026: cash repurchases 642786000 USD.

### Are managers owners

Insiders own 0.5% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); KMX.US SharesStats.PercentInsiders = 0.475 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 9.4% yearly over ten years; actual decline was 18.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-04-15); Ten-year compound average after fade. Initial solved rate 0.12257567438200623. Price 52.62; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 2.7342276146649085 → FY2026 0.3540541822197232. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $49.94 per share

- 2016-11: $57.79 per share

- 2016-12: $64.39 per share

- 2017-01: $66.71 per share

- 2017-02: $64.54 per share

- 2017-03: $59.22 per share

- 2017-04: $58.50 per share

- 2017-05: $62.83 per share

- 2017-06: $63.06 per share

- 2017-07: $66.25 per share

- 2017-08: $67.15 per share

- 2017-09: $75.81 per share

- 2017-10: $75.10 per share

- 2017-11: $68.91 per share

- 2017-12: $64.13 per share

- 2018-01: $71.37 per share

- 2018-02: $61.92 per share

- 2018-03: $61.94 per share

- 2018-04: $62.50 per share

- 2018-05: $68.92 per share

- 2018-06: $72.87 per share

- 2018-07: $74.68 per share

- 2018-08: $78.05 per share

- 2018-09: $74.67 per share

- 2018-10: $67.91 per share

- 2018-11: $66.07 per share

- 2018-12: $62.73 per share

- 2019-01: $58.78 per share

- 2019-02: $62.10 per share

- 2019-03: $69.80 per share

- 2019-04: $77.86 per share

- 2019-05: $78.28 per share

- 2019-06: $86.83 per share

- 2019-07: $87.76 per share

- 2019-08: $83.28 per share

- 2019-09: $88.00 per share

- 2019-10: $93.17 per share

- 2019-11: $97.26 per share

- 2019-12: $87.67 per share

- 2020-01: $97.04 per share

- 2020-02: $87.31 per share

- 2020-03: $53.83 per share

- 2020-04: $73.65 per share

- 2020-05: $88.05 per share

- 2020-06: $89.55 per share

- 2020-07: $96.97 per share

- 2020-08: $106.93 per share

- 2020-09: $91.91 per share

- 2020-10: $86.44 per share

- 2020-11: $93.48 per share

- 2020-12: $94.46 per share

- 2021-01: $117.78 per share

- 2021-02: $119.51 per share

- 2021-03: $132.66 per share

- 2021-04: $133.24 per share

- 2021-05: $115.19 per share

- 2021-06: $129.15 per share

- 2021-07: $133.95 per share

- 2021-08: $125.21 per share

- 2021-09: $127.96 per share

- 2021-10: $136.92 per share

- 2021-11: $141.25 per share

- 2021-12: $130.23 per share

- 2022-01: $111.17 per share

- 2022-02: $109.33 per share

- 2022-03: $96.48 per share

- 2022-04: $85.78 per share

- 2022-05: $99.27 per share

- 2022-06: $90.48 per share

- 2022-07: $99.54 per share

- 2022-08: $88.44 per share

- 2022-09: $66.02 per share

- 2022-10: $63.01 per share

- 2022-11: $69.36 per share

- 2022-12: $60.89 per share

- 2023-01: $70.45 per share

- 2023-02: $69.04 per share

- 2023-03: $64.28 per share

- 2023-04: $70.03 per share

- 2023-05: $72.21 per share

- 2023-06: $83.70 per share

- 2023-07: $82.61 per share

- 2023-08: $81.68 per share

- 2023-09: $70.73 per share

- 2023-10: $61.09 per share

- 2023-11: $63.94 per share

- 2023-12: $76.74 per share

- 2024-01: $71.18 per share

- 2024-02: $79.00 per share

- 2024-03: $87.11 per share

- 2024-04: $67.97 per share

- 2024-05: $70.26 per share

- 2024-06: $73.34 per share

- 2024-07: $84.44 per share

- 2024-08: $84.55 per share

- 2024-09: $77.38 per share

- 2024-10: $72.38 per share

- 2024-11: $83.97 per share

- 2024-12: $81.76 per share

- 2025-01: $85.64 per share

- 2025-02: $82.97 per share

- 2025-03: $77.92 per share

- 2025-04: $64.67 per share

- 2025-05: $64.46 per share

- 2025-06: $67.21 per share

- 2025-07: $56.61 per share

- 2025-08: $61.35 per share

- 2025-09: $44.87 per share

- 2025-10: $41.91 per share

- 2025-11: $38.66 per share

- 2025-12: $38.64 per share

- 2026-01: $44.54 per share

- 2026-02: $43.17 per share

- 2026-03: $41.58 per share

- 2026-04: $39.31 per share

- 2026-05: $44.62 per share

- 2026-06: $52.89 per share

- 2026-07: $57.26 per share

- 2026-08: $61.33 per share

- 2026-09: $55.11 per share

- 2026-10: $52.62 per share

## Annual estimated value (USD per share)

- FY2017: low $42.18 per share, central $60.25 per share, high $70.78 per share

- FY2018: low $48.30 per share, central $69.00 per share, high $81.05 per share

- FY2019: low $54.49 per share, central $77.84 per share, high $91.44 per share

- FY2020: low $60.04 per share, central $79.99 per share, high $93.66 per share

- FY2021: low $54.58 per share, central $62.10 per share, high $72.12 per share

- FY2022: low $91.85 per share, central $104.51 per share, high $121.37 per share

- FY2023: low $88.36 per share, central $100.55 per share, high $116.76 per share

- FY2024: low $66.23 per share, central $75.32 per share, high $87.43 per share

- FY2025: low $22.93 per share, central $26.09 per share, high $30.30 per share

- FY2026: low $21.13 per share, central $24.04 per share, high $27.92 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1170010/000117001026000021/kmx-20260228.htm); period 2026-02-28, filed 2026-04-15.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.