CARMAX INC (KMX) Stock Fundamental Analysis

USA - New York Stock Exchange - NYSE:KMX - US1431301027 - Common Stock

46.77 USD

-1.06 (-2.22%)

Last: 1/23/2026, 11:17:21 AM

Fundamental Rating

Overall KMX gets a fundamental rating of 3 out of 10. We evaluated KMX against 121 industry peers in the Specialty Retail industry. Both the profitability and financial health of KMX have multiple concerns. KMX is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

1.1 Basic Checks

In the past year KMX was profitable.
In the past year KMX had a positive cash flow from operations.
Each year in the past 5 years KMX has been profitable.
KMX had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

The Return On Assets of KMX (1.79%) is comparable to the rest of the industry.
The Return On Equity of KMX (7.55%) is better than 62.81% of its industry peers.
KMX has a Return On Invested Capital (0.49%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for KMX is significantly below the industry average of 12.37%.

		Industry Rank	Sector Rank
ROA	1.79%
ROE	7.55%
ROIC	0.49%

ROA(3y)1.81%

ROA(5y)2.66%

ROE(3y)8.18%

ROE(5y)12.73%

ROIC(3y)0.57%

ROIC(5y)1.15%

1.3 Margins

KMX's Profit Margin of 1.77% is in line compared to the rest of the industry. KMX outperforms 59.50% of its industry peers.
In the last couple of years the Profit Margin of KMX has declined.
With a Operating Margin value of 0.59%, KMX perfoms like the industry average, outperforming 41.32% of the companies in the same industry.
In the last couple of years the Operating Margin of KMX has declined.
KMX's Gross Margin of 11.06% is on the low side compared to the rest of the industry. KMX is outperformed by 90.08% of its industry peers.
KMX's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector Rank
OM	0.59%
PM (TTM)	1.77%
GM	11.06%

OM growth 3Y-30.89%

OM growth 5Y-27.28%

PM growth 3Y-19.26%

PM growth 5Y-15.36%

GM growth 3Y2.19%

GM growth 5Y-3.87%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so KMX is destroying value.
KMX has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, KMX has less shares outstanding
The debt/assets ratio for KMX has been reduced compared to a year ago.

2.2 Solvency

KMX has an Altman-Z score of 1.58. This is a bad value and indicates that KMX is not financially healthy and even has some risk of bankruptcy.
KMX's Altman-Z score of 1.58 is on the low side compared to the rest of the industry. KMX is outperformed by 64.46% of its industry peers.
KMX has a debt to FCF ratio of 8.99. This is a slightly negative value and a sign of low solvency as KMX would need 8.99 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 8.99, KMX is in line with its industry, outperforming 59.50% of the companies in the same industry.
A Debt/Equity ratio of 2.76 is on the high side and indicates that KMX has dependencies on debt financing.
The Debt to Equity ratio of KMX (2.76) is worse than 71.90% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	2.76
Debt/FCF	8.99
Altman-Z	1.58

ROIC/WACC0.11

WACC4.59%

2.3 Liquidity

KMX has a Current Ratio of 1.99. This is a normal value and indicates that KMX is financially healthy and should not expect problems in meeting its short term obligations.
KMX's Current ratio of 1.99 is fine compared to the rest of the industry. KMX outperforms 79.34% of its industry peers.
A Quick Ratio of 0.51 indicates that KMX may have some problems paying its short term obligations.
KMX has a Quick ratio (0.51) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	1.99
Quick Ratio	0.51

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

KMX shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.75%.
The Earnings Per Share has been decreasing by -9.31% on average over the past years.
KMX shows a decrease in Revenue. In the last year, the revenue decreased by -0.15%.
Measured over the past years, KMX shows a small growth in Revenue. The Revenue has been growing by 5.34% on average per year.

EPS 1Y (TTM)4.75%

EPS 3Y-22.26%

EPS 5Y-9.31%

EPS Q2Q%-46.91%

Revenue 1Y (TTM)-0.15%

Revenue growth 3Y-6.17%

Revenue growth 5Y5.34%

Sales Q2Q%-6.9%

3.2 Future

KMX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 24.00% yearly.
Based on estimates for the next years, KMX will show a small growth in Revenue. The Revenue will grow by 1.32% on average per year.

EPS Next Y-17.2%

EPS Next 2Y-8.02%

EPS Next 3Y-0.53%

EPS Next 5Y24%

Revenue Next Year-2.84%

Revenue Next 2Y-1.35%

Revenue Next 3Y-0.26%

Revenue Next 5Y1.32%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 15.14 indicates a correct valuation of KMX.
Based on the Price/Earnings ratio, KMX is valued a bit cheaper than 77.69% of the companies in the same industry.
When comparing the Price/Earnings ratio of KMX to the average of the S&P500 Index (27.30), we can say KMX is valued slightly cheaper.
A Price/Forward Earnings ratio of 16.91 indicates a correct valuation of KMX.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KMX indicates a somewhat cheap valuation: KMX is cheaper than 71.07% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of KMX to the average of the S&P500 Index (24.32), we can say KMX is valued slightly cheaper.

		Industry Rank	Sector Rank
PE	15.14
Fwd PE	16.91

4.2 Price Multiples

KMX's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. KMX is more expensive than 66.94% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of KMX indicates a rather cheap valuation: KMX is cheaper than 97.52% of the companies listed in the same industry.