DailyIQ
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Sector:Consumer CyclicalAll sectors
Last updated 6 minutes ago

KMX·CarMax, Inc.

$.
+. (+.%)
After Hours
High
$54.25
Open
$51.55
Market Cap
7.26B
52W High
$68.71
Low
$51.38
P. Close
$53.49
P/E
32.62
52W Low
$30.26
Fwd P/E
17.69
DailyIQ Est.
$45.27
Technical Score (1D)
91
BUY
News Sentiment
67
BULLISH
The June earnings report showed a beat on revenue and earnings per share even though GAAP net income fell 12 %, prompting analysts to raise price targets and insiders to buy shares, which signals confidence in the company’s sales and pricing strategy. This earnings beat indicates that the company’s current mix of inventory and marketing spend is translating into higher top‑line growth, a factor that could lift the stock in the short term. The subsequent lift in the price target to $51.40 reflects expectations of stronger earnings and a favorable market environment, suggesting that the market anticipates continued upside. Earlier Q1 FY2027 results revealed revenue growth and a 3.3 % rise in unit volume, but margin compression and a drop in EPS to $1.31 highlight the cost of the firm’s market‑share expansion. CarMax’s short‑term growth strategy—accepting lower profits to build inventory and marketing spend—explains the margin pressure and could affect near‑term earnings. Management’s warning in Q2 about cost pressures and execution friction underscores that the planned initiatives—pricing, inventory mix, logistics, and digital tools—must be executed effectively to sustain the earnings beat. Traders should monitor the upcoming Q3 earnings release for confirmation of the new price target and the effectiveness of cost‑control measures. Additionally, watch inventory turnover data and digital customer experience metrics to gauge whether the growth strategy translates into higher sales volumes and improved margins.
Earnings Summary
CarMax operates as a leading used vehicle retailer in the United States, offering a comprehensive car‑buying experience through its Sales Operations and Auto Finance segments, and competes within the broader auto & truck dealership sector. In the most recent two quarters, Q4 2026 and Q1 2027, the company posted revenue of $5.95 billion and $8.01 billion respectively, reflecting a 2.6% increase from Q4 2025 to Q4 2026 and a 34.8% jump to Q1 2027; EPS rose from $0.34 to $1.31, a 205% rise, with each quarter beating analyst estimates (Q4 2026 EPS beat $0.21167, Q1 2027 EPS beat $0.70). Compared to the prior two quarters (Q3 2026 and Q4 2025), revenue remained flat from Q4 2025 to Q3 2026, then accelerated in Q4 2026, while EPS held steady at $0.43 in Q3 2026 and Q4 2025 before declining to $0.34 in Q4 2026 and surging to $1.31 in Q1 2027, illustrating a pattern of consistent earnings beats across the period. Historically, CarMax has shown a strong YoY revenue trajectory, with a 38% increase from Q4 2025 to Q1 2027, and EPS growth exceeding 200% over the same span, underscoring a trend of beating expectations even as the company navigates inventory and cost dynamics. Recent news highlights the Q1 2027 earnings release, which reported a net income of $185.6 million and revenue of $8.01 billion, both surpassing forecasts, and notes that cost controls and inventory turnover are sustaining profitability amid competitive pressures from rivals such as Carvana; the company’s upcoming Q2 earnings release is expected to focus on modest revenue growth, higher acquisition costs, and margin impacts, with investors watching inventory management and pricing strategy for clues on future performance. Investors should watch for commentary on inventory levels, pricing adjustments, and cost‑control initiatives in the next earnings call, as well as any discussion of macro factors like interest rates and consumer credit conditions that could influence vehicle financing demand and overall market demand for used vehicles.

EPS

EstBeatMiss
$0.02$0.38$0.75$1.11$1.48Q3'25Q4'25Q3'26Q4'26Q1'27
QtrEstActual+/−
Q1'27$0.70$1.31+87.1%
Q4'26$0.21$0.34+60.6%
Q3'26$0.19$0.43+131.6%
Q4'25$0.32$0.43+36.1%
Q3'25$1.04$0.64-38.6%

Revenue

EstBeatMiss
$5.3B$6.1B$6.8B$7.6B$8.4BQ3'25Q4'25Q3'26Q4'26Q1'27
QtrEstActual+/−
Q1'27$7.5B$8.0B+6.9%
Q4'26$5.7B$5.9B+3.8%
Q3'26$5.6B$5.8B+2.7%
Q4'25 - $5.8B -
Q3'25 - $6.6B -
Full Earnings BreakdownEstimates, actuals, guidance, and historical context
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Market Data

KMX Stock Snapshot

KMX is currently trading at $53.49, giving CarMax, Inc. a market cap of 7.26B and a P/E ratio of 32.6. Today's range spans $51.38–$54.25, with shares opening at $51.55 and moving up $0.00 (0.0%) from the prior close. DailyIQ's technical score sits at 91/100 (BUY) with a news sentiment reading of 67/100.

Over the past year KMX has traded between $30.26 and $68.71 - the current price is +76.8% off the 52-week low and -22.2% from the high. 28 analysts cover the stock with a Hold consensus and a mean 12-month target of $51.31 (range $33.00–$96.00), implying downside of -4.1%.

KMX is surfing the Consumer Cyclical sector momentum as a small-cap (7.26B market cap) - and the numbers back it up. Technical score: 91/100 (BUY). Sentiment: bullish (67/100). Price: $53.49 (in the middle of its 52-week range). The current P/E ratio stands at 32.6. In smaller-cap names, sector momentum tends to amplify company-specific signals - which makes the bullish read here more valuable than the same signal would be in a mega-cap peer. Annual range: $30.26–$68.71.

The combination of a BUY technical signal (91/100) and bullish news sentiment (67/100) in a small-cap like KMX (7.26B, Consumer Cyclical) creates the kind of setup that shows up in small-cap momentum screens used by growth-oriented funds. At $53.49 (in the middle of its 52-week range in $30.26–$68.71), the stock is not yet crowded — which means the entry risk-reward is better than it will be if the technical and sentiment setup persists and attracts wider institutional attention.