📊 KMX Key Takeaways
Is Carmax Inc. (KMX) a Good Investment?
CarMax exhibits severe fundamental deterioration with EPS down 47.7% YoY, net margins collapsed to 1.0%, and dangerously high leverage (2.93x D/E) against minimal cash reserves of $122.8M relative to $17.3B debt. Flat revenue growth combined with razor-thin profitability and poor capital returns (4.2% ROE) suggest structural challenges requiring immediate operational turnaround.
Cash generation is solid with strong operating cash flow and a healthy FCF margin, and liquidity appears adequate. However, profitability is thin, revenue growth is flat, and leverage is high, leaving limited cushion against macro or credit headwinds. Monitoring margin recovery and debt service capacity is key before a more constructive stance.
Carmax Inc. Key Strengths (KMX)
- Operating cash flow of $1.8B demonstrates core business cash generation capability
- Established scale with $26.4B asset base and market infrastructure
- Adequate current ratio of 2.20x for short-term liquidity management
- Robust operating cash flow and 9.7% FCF margin
- Healthy current ratio (~2.0x) supporting liquidity
- EPS grew 6.3% YoY despite flat revenue
KMX Stock Risks: Carmax Inc. Investment Risks
- Excessive leverage with 2.93x debt-to-equity ratio and critically low cash buffer of $122.8M against $17.3B long-term debt
- Severe profitability crisis: net margin 1.0%, EPS down 47.7% YoY, ROE 4.2%, ROA 0.9%
- Stagnant revenue growth (0% YoY) with compressed 10.8% gross margins indicating intense competition and pricing pressure
- Quick ratio of 0.49x shows dependency on inventory turnover for liquidity sustainability
- Minimal earnings cushion and missing interest coverage data raise debt service sustainability concerns
- High leverage (2.74x D/E) with sizable long-term debt
- Thin net margin (1.8%) and low ROA/ROE
- Interest coverage and operating income not evident, signaling earnings pressure
Key Metrics to Watch
- Net profit margin recovery trajectory and path to sustainable profitability
- Debt-to-equity ratio trend and cash balance relative to debt obligations
- Revenue growth acceleration and same-store sales performance
- Operating cash flow sustainability and free cash flow adequacy for debt service
- Interest coverage ratio and refinancing requirements
- Gross margin trend
- Interest coverage ratio
Carmax Inc. (KMX) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 4.8% FCF margin may limit capital allocation flexibility. Strong liquidity with a 2.20x current ratio provides a solid financial cushion.
KMX Profit Margin, ROE & Profitability Analysis
KMX vs Automotive Sector: How Carmax Inc. Compares
How Carmax Inc. compares to Automotive sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Carmax Inc. Stock Overvalued? KMX Valuation Analysis 2026
Based on fundamental analysis, Carmax Inc. shows some fundamental concerns relative to the Automotive sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Carmax Inc. Balance Sheet: KMX Debt, Cash & Liquidity
KMX Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Carmax Inc.'s revenue has declined by 17% over the 5-year period, indicating business contraction. The most recent EPS of $3.02 reflects profitable operations.
KMX Revenue Growth, EPS Growth & YoY Performance
KMX Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2027 | $7.5B | $185.6M | $1.31 |
| Q3 2026 | $5.8B | $62.2M | $0.43 |
| Q2 2026 | $6.6B | $95.4M | $0.64 |
| Q1 2026 | $7.1B | $152.4M | $0.97 |
| Q3 2025 | $6.1B | $82.0M | $0.52 |
| Q2 2025 | $7.0B | $118.6M | $0.75 |
| Q1 2025 | $7.1B | $152.4M | $0.97 |
| Q3 2024 | $6.1B | $37.6M | $0.24 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Carmax Inc. Dividends, Buybacks & Capital Allocation
KMX SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Carmax Inc. (CIK: 0001170010)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| Jun 29, 2026 | 4 | xslF345X06/wk-form4_1782767320.xml | View → |
| Jun 29, 2026 | 4 | xslF345X06/wk-form4_1782767314.xml | View → |
| Jun 29, 2026 | 4 | xslF345X06/wk-form4_1782767308.xml | View → |
| Jun 29, 2026 | 4 | xslF345X06/wk-form4_1782767280.xml | View → |
| Jun 29, 2026 | 4 | xslF345X06/wk-form4_1782767274.xml | View → |
❓ Frequently Asked Questions about KMX
What is the AI rating for KMX?
Carmax Inc. (KMX) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 74% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are KMX's key strengths?
Claude: Operating cash flow of $1.8B demonstrates core business cash generation capability. Established scale with $26.4B asset base and market infrastructure. ChatGPT: Robust operating cash flow and 9.7% FCF margin. Healthy current ratio (~2.0x) supporting liquidity.
What are the risks of investing in KMX?
Claude: Excessive leverage with 2.93x debt-to-equity ratio and critically low cash buffer of $122.8M against $17.3B long-term debt. Severe profitability crisis: net margin 1.0%, EPS down 47.7% YoY, ROE 4.2%, ROA 0.9%. ChatGPT: High leverage (2.74x D/E) with sizable long-term debt. Thin net margin (1.8%) and low ROA/ROE.
What is KMX's revenue and growth?
Carmax Inc. reported revenue of $25.9B.
Does KMX pay dividends?
Carmax Inc. does not currently pay dividends.
Where can I find KMX SEC filings?
Official SEC filings for Carmax Inc. (CIK: 0001170010) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is KMX's EPS?
Carmax Inc. has a diluted EPS of $1.68.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is KMX's fundamental grade?
Based on our AI fundamental analysis in June 2026, Carmax Inc. has a C grade with 74% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is KMX stock overvalued or undervalued?
Valuation metrics for KMX: ROE of 4.2% (sector avg: 12%), net margin of 1.0% (sector avg: 6%). Compare these metrics with sector averages to assess valuation.
What is KMX's AI grade for 2026?
Our dual AI analysis gives Carmax Inc. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is KMX's free cash flow?
Carmax Inc.'s operating cash flow is $1.8B, with capital expenditures of $541.0M. FCF margin is 4.8%.
How does KMX compare to other Automotive stocks?
Vs Automotive sector averages: Net margin 1.0% (avg: 6%), ROE 4.2% (avg: 12%), current ratio 2.20 (avg: 1.2).
Is Carmax Inc. carrying too much debt?
KMX has a debt-to-equity ratio of 2.93x, which is above the Automotive sector average of 1x. However, the current ratio of 2.20 suggests adequate short-term liquidity.